* 'Put up or shut up' deadline imposed by UK Takeover Panel
* Melrose says disappointed at Charter representations
* Charter shares down 1.9 pct, Melrose 3.9 pct lower
(Adds analyst comment, details; updates shares)
By Rosalba O'Brien and Adveith Nair
LONDON, Aug 11 The UK's Takeover Panel has given
manufacturing buyout firm Melrose less than a month to
make a formal bid for Charter International , putting
pressure on the suitor to decide if it will proceed without
seeing Charter's books.
The panel, which sets the rules on mergers and acquisitions,
said on Thursday it was giving Melrose a September 6 deadline,
following representations from Charter's advisers.
Melrose, which buys and fixes ailing manufacturing companies
before selling them on, first bid for Charter in late June, when
a profit warning sent Charter's shares tumbling.
Charter rejected a sweetened Melrose offer of 840 pence a
share, or 1.4 billion pounds ($2.3 billion), in July, and has
refused to open its books to the buyout firm.
But Melrose has said it would not be appropriate to proceed
with an offer without undertaking due diligence.
A sharp drop of around 20 percent in Charter's share price
since July, to around 640 pence, in choppy markets has further
complicated the situation, putting pressure on Charter to accept
It also increases the likelihood that Melrose shareholders
may not now be amenable to a bid, analysts say.
"This is a stalemate situation with the bear market coming
to Charter's defence," said Panmure Gordon analyst Oliver
"(The panel ruling) has been overdue but it narrows
Melrose's options. It gets a bit messy."
Top Charter shareholders including Aviva and Schroders, who
together own 14 percent, have gone public in asking management
to open its books to Melrose. Bankers say hedge funds that
control up to 20 percent of the company also favour a deal with
Some analysts have said that, should a takeover panel order
emerge, it could antagonise Charter's shareholders further.
The 'put up or shut up' deadline procedure is intended to
protect target companies from months of expensive distraction.
If no bid emerges before the deadline, the bidder must wait at
least six months before attempting a fresh approach.
"We are disappointed that Charter has taken this step,"
Melrose said in a statement on Thursday. "It appears that they
are not listening to the clear views of their shareholders."
A Charter spokeswoman noted the overall offer period to the
September deadline would be almost 10 weeks from when Melrose
made its initial announcement on June 29.
"Charter have been listening to all our shareholders and
have given plenty of time to Melrose to make a proposal that our
board would find compelling," she said.
Shares in Charter were down 1.9 percent at 645 pence in
volatile trade on Monday. Melrose shares were down 3.88 percent
at 295 pence, having fallen 10 percent since the company
sweetened its approach.
($1 = 0.619 British Pounds)
(Editing by Paul Sandle and David Hulmes)