Goldman Sachs is trying to generate an auction for Charter International by flushing out a rival bid for the underperforming engineering group from the likes of Illinois Tool Works or Lincoln Electric.
The two American firms are believed to be weighing their options after Charter rejected a £1.3 billion, or 780p a share, proposal by Melrose, the industrial turnround specialist.
A successful bid for Charter would mark the end of one of Britain’s oldest engineering firms. It was founded by Cecil Rhodes as the British South Africa Company in 1889.
Lars Emilson, Charter’s chairman, hired Goldman to bolster its defence against the Melrose approach. The firm was already working with JP Morgan Cazenove and Royal Bank of Scotland.
A source said Goldman’s appointment was “a reflection that the Charter board is determined to maximise shareholder value”. Big investors in both Charter and Melrose said the Wall Street bank had been drafted in to start an auction.
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Melrose swooped on Charter after a profit warning led to the engineer parting company with chief executive Michael Foster on Monday. The initial 780p cash and shares proposal was rejected as “opportunistic”.