US industrial giant Manitowoc has increased its offer for kitchen equipment maker Enodis to £1.08 billion to trump a rival offer.
Manitowoc raised its bid to 294 pence a share, topping an agreed approach of 282 pence a share from rival Illinois Tool Works. The offer from ITW beat a bid of 260 pence a share from Manitowoc.
Enodis, which makes fryers for fast food groups such as McDonald's and Burger King and has a base in the West Midlands, will also pay an interim dividend of two pence a share.
Manitowoc said that, assuming the deal is completed in the second half of 2008, it is expected to be earnings enhancing in two years.
The increased offer represents a premium of 108 per cent to Enodis' closing price on April 8, the day before it entered into an offer period.
Manitowoc called on Enodis' directors to recommend unanimously that shareholders vote in favour of the improved offer, which is conditional on approval by US and European antitrust authorities.
Manitowoc said it has committed funds to finance the increased offer from its backers JP Morgan, Deutsche Bank, Morgan Stanley, and BNP Paribas.
Enodis, which has seen adjusted first-half pretax profit rise six per cent to £28.3 million, draws around 86 per cent of its operating profit from North America.
However, it has already rejected one Manitowoc takeover two years ago, while it has also dismissed approaches from another US firm, Middleby, as well as Solihull-based Aga Foodservice.
Enodis, which employs more than 6,000 people in eight countries, including 400 at three sites in the UK – 200 people at Scotsman Beverage Systems in Halesowen – last week reported sales up to £394.6 million and despite the woes in the US economy said it was confident in its long-term prospects.
The firm has implemented a cost-cutting programme to insulate itself from the declining market in North America. Measures have included a restructuring of the business and a reduction in staff.