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Melrose in talks about $2.3B offer for Elster

by Laura Board  |  Published June 18, 2012 at 8:10 AM
German meters maker Elster Group SE said Monday, June 18, that it's in talks about a $2.3 billion takeover offer from U.K. listed industrial investor Melrose plc.  

Elster is listed on the New York Stock Exchange, with CVC Capital Partners  its largest shareholder.

The Essen, Germany-based manufacturer said Melrose proposed to pay $20.50 per share, a 25% premium to its $16.40 closing price on Friday.  

It said CVC, though Rembrandt Holdings SA, has given its conditional backing to the bid and agreed to pay Melrose a breakup fee in certain circumstances.  

"The administrative board of Elster is in the process of evaluating whether the proposal is in the best interest of Elster and its stakeholders," it said.  "There can be no assurances that any transaction will occur, or if it does, what the terms of such transaction would be."  

Melrose, which said it is still conducting due diligence, said its offer would be financed through new debt and a share sale to existing investors.  Its offer hinges on gaining a recommendation from the Elster board and a "hard irrevocable undertaking" from CVC's Rembrandt to accept the offer.
 
Elster is led by CEO Simon Beresford-Wylie. CVC held an IPO for the company in September 2010, having bought the-then Ruhrgas Industries from E.ON AG  five years earlier.  Elster had revenue of $1.869 billion last year and Ebitda of $280 million.
 
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Tags: CVC Capital Partners | Elster Group SE | Melrose plc | valuation

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