Melrose Ind Share News (MRO)

Mon, 18th Jun 2012 09:49

(Fixes typo in paragraph 1)

* Could offer $20.50/ADS for Elster

* Deal conditional on approval from Elster board

* Deal conditional on undertaking from Elster's top shareholder



June 18 (Reuters) - British buyout group Melrose Plc is in talks to buy Germany's utility meter maker Elster Group SE for $2.3 billion, the two companies said on Monday.

Melrose, which buys underperforming manufacturing businesses and turns them around before selling them, could offer $20.50 per Elster's American Depository Share, a 25 percent premium to the German company's closing price on Friday.

Melrose, however, said it would not go ahead with the acquisition without a recommendation from Elster's board or an undertaking from Elster's largest shareholder, Rembrandt Holdings.

Rembrandt, which has a 62 percent stake in Elster, is owned by private equity firm CVC Capital Parnters.

Melrose's announcement comes nearly a year after the company walked away from toolmaker Charter International in the face of a higher offer from U.S. company Colfax Group.

Shares in Melrose closed at 382.5 on Friday on the London Stock Exchange.

(Reporting by Abhishek Takle in Bangalore; Editing by Don Sebastian) Keywords: ELSTERGROUP OFFER/

(abhishek.takle@thomsonreuters.com; within UK +44 20 7542 1810; outside UK +91 80 4135 6102; Reuters Messaging: abhishek.takle.thomsonreuters.com@reuters.net)

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