(Reuters) -Private equity firm Arcline Investment Management on Wednesday proposed to buy Circor International for $57 per share in cash, topping a rival bid from KKR & Co for the industrial machinery maker.
The new offer is $6 more than the rival bid and comes after the target company snubbed a proposal from an unnamed bidder, which sources identified as Arcline, and instead chose to sell itself to KKR in a $1.7 billion deal.
Meanwhile, KKR said on Wednesday said a potential deal would have no antitrust risks given the lack of competitive overlap, sending the shares of Circor to more than five-year high of $54.94.
Circor, which makes flow-control products to help manage and control liquids and gases, did not respond to a Reuters request for comment.
Arcline’s funds own a direct competitor of Circor called Fairbanks Morse Defense, a provider of diesel engines and equipment to the U.S. Navy, KKR said.
“This is particularly important in the current regulatory climate given heightened scrutiny around consolidation between competing suppliers of the Defense Industrial Base,” the private equity said.
Arcline said its binding proposal would expire if the board does not declare it to be a “superior proposal” by no later than 8:00 p.m. ET on Thursday. It said its bid was supported by financing from BMO Capital Markets Corp and Bank of Montreal.
Circor too had said on Tuesday that KKR offered more financing certainty as well as a clearer and faster path to antitrust approvals.
Circor saw a 9% rise in orders in its most recent quarter, reflecting demand for its services as it benefited from a recovery in the commercial aerospace market.
BMO Capital Markets is the financial adviser to Arcline.
(Reporting by Priyamvada C and Pratyush Thakur in Bengaluru; Editing by Dhanya Ann Thoppil, Anil D’Silva and Arun Koyyur)