US group undeterred in Kidde takeover bid

United States engineering giant UTC today pledged to battle on in its bid to buy fire extinguisher maker Kidde.

The US group, whose £1.35bn (€1.96bn) bid for the UK company was rebuffed yesterday, said it intended to approach Kidde’s shareholders directly to secure access to its books after having a demand for “satisfactory” access denied.

It added that it had received the go-ahead from US financial regulators to buy up to 30% of Kidde’s ordinary shares.

“UTC is considering whether to proceed with an offer and intends to meet with shareholders in order to seek their support for satisfactory due diligence access,” UTC said in a statement. “There can be no certainty as to whether an offer will be made.”

Kidde, which claims UTC’s offer undervalues it, said it had been ready to give information to UTC to enable it to increase its offer.

It said it had talked to shareholders contacted by UTC and had heard nothing that would cause it to reconsider its position.

Kidde’s chairman Norman Askew said Kidde’s board was confident about the firm’s ability to continue producing attractive shareholder returns.

“For any offer for Kidde to be recommended by the board, it will need fully to reflect Kidde’s current strengths and its prospects,” he said.

A takeover of Kidde by UTC would bring Kidde back under one roof with Chubb, the security business that it was originally twinned with under former Derby-based industrial conglomerate Williams Holdings, which was demerged in 2000.

UTC’s businesses include Pratt & Whitney jet engines, Sikorsky helicopters and Otis lifts.

Kidde provides fire and safety equipment to three key sectors, including aerospace, residential and commercial, and heavy industry.

It makes products ranging from extinguishers, fire blankets and smoke alarms to industrial fire engines, military bridges and closed circuit security cameras.

The group, which employs 9,000 staff worldwide, revealed earlier this year that its profits rose 26.5% to £86.5m (€125.3m) during 2003.

Analysts predicted that UTC could face opposition from rivals in attempting to win Kidde.

The UK group is in good shape and any successful bid would have to be at least 185p a share, valuing the firm at £1.56bn (€2.26bn), they said.