In a matter of time, Chubb deal expects to close
July 24, 2003
HARTFORD, Conn. - Officials from United Technologies Corp. expect to close on its acquisition of fire and security service provider Chubb Plc. by the end of the month, a deal that will pave its way into the security market.
The $1 billion transaction has already received federal antitrust regulatory approval, but prior to press time UTC extended its deadline to acquire shares from Chubb stockholders. As of July 9, UTC reported only 40 percent of Chubb shareholders had tendered their interest in the company. Another 5 percent of outstanding shares were purchased by UTC on the open market.
The deadline extension to July 28 and UTCÃ¢â‚¬â„¢s slow start to acquire shares indicates shareholders may be less than enthusiastic about the transaction, said Jack Mallon, managing director of Mallon Capital.
"Early on they were not getting the overwhelming endorsement from the shareholders," said Mallon. "It happens, but it happens more frequently when shareholders are not enamored with the deal."
Since going public two years ago as it broke away from holding company Williams Plc., ChubbÃ¢â‚¬â„¢s stock price has been unsteady. In early July, it was trading at slightly more than $1 per share after the extension of the deadline to acquire its stock.
Still, company officials at UTC remain optimistic about the deal, expecting it to close only a few months after the transaction was made public. Officials from UTC did not return phone calls by press time.