LONDON (AP) -- Shares in Chloride Group PLC, Europe's largest maker of backup power supplies, jumped almost 23 percent after the company said it had rejected a 657 million pound (US$1.3 billion; euro0.84 billion) takeover offer.
Chloride did not name its suitor. Analysts said that potential bidders include U.S. peers Emerson Electric Co. and Eaton Corp. and France's Schneider Electric SA.
The British company, which specializes in maintaining uninterrupted power to information technology systems, said that the preliminary approach of an all-cash offer of 255 pence (US$4.99; euro3.23) per share ''materially undervalued the company and its prospects.''
''Accordingly, it was not in the interests of Chloride and its shareholders and the board has rejected it.''
The stock was trading just above that level at 255.5 pence (US$5.00; euro3.23) midmorning on Monday.
ABN Amro analyst Sue Cox said that Chloride is an ''excellently managed business in a fast growing, business-critical area.''
Cox said that recent deals in the sector, such as Schneider Electric's US$6.1 billion purchase of American Power Conversion Corp. in 2006 indicated that a bidder for Chloride would have to pay at least 288 pence (US$5.64; euro3.65).
''We have long talked of Chloride as being a potential bid candidate,'' Cox said in a note. ''Anyone wanting to bid for this jewel of a company will have to pay up.''
The company's customers include banks HSBC Holdings PLC and Barclays PLC, retailers J Sainsbury PLC and Ikea and energy companies BP PLC and Total SA.
Chloride said it believes it has ''a robust business model, clear strategy and strong positions in geographies and higher growth market sectors -- including IT services, data centers, energy and oil & gas -- where secure power is increasingly critical to business continuity.''
''Accordingly, the board considers the company to have excellent prospects as an independent group,'' it added.
The company was forced to make a statement by market rules after speculation drove its shares more than 25 percent higher.
