Manitowoc trumps rival with $2.1 bln Enodis offer

LONDON (Reuters) - U.S. diversified manufacturer Manitowoc (MTW.N) has raised its bid for British kitchen equipment maker Enodis ENO.L to 1.08 billion pounds ($2.1 billion) to trump a rival offer.

Manitowoc, which makes cranes and restaurant equipment, said on Monday it was offering 294 pence a share for Enodis, topping an agreed 282p bid from U.S. rival Illinois Tool Works Inc (ITW) (ITW.N).

The offer from ITW beat an earlier bid of 260 pence a share from Manitowoc.

The two U.S.-based companies, which are bidding more than twice Enodis's market value before the bidding war started, are trying to buy the company as they gamble on rising demand for fast food in markets such as Asia boosting sales at the company.

ITW said late on Monday it was considering its position with respect to Enodis, and said it will make a further announcement in due course.

A spokesman for Enodis declined to comment on Monday's developments.

Enodis, which makes fryers for fast-food groups including McDonald's (MCD.N) and Burger King (BKC.N), will pay an interim dividend of 2p a share.

Shares in Enodis rose 2.3 percent Monday to 305 pence, above the offer price, suggesting investors believe ITW may come back with another offer.

"I certainly wouldn't discount it. I don't think it's necessarily finished," said Arbuthnot Securities analyst Michael Blogg. "Because ITW has fewer antitrust issues than Manitowoc, in theory it should be able to afford to pay more."

Analysts say ITW would be less likely to be required to sell businesses in order to obtain regulatory approval because it has less direct overlap with Enodis.

With a market capitalization of $5.3 billion, Manitowoc is less than a fifth of the size of ITW, which has a market value of $28.6 billion.

DINING OUT ON GROWTH

Enodis, whose market capitalization stands at 1.12 billion pounds, is seen as an attractive takeover target because of the fast growth experienced by the catering equipment industry, particularly in the United States, and especially in the fast-food category.

A source familiar with the matter said the board of ITW is set to meet later on Monday to discuss the company's next move, but added that no decision on whether to raise its offer will necessarily be taken immediately.

Manitowoc said that, assuming the deal is completed in the second half of 2008, it is expected to be earnings enhancing in two years.

The increased offer represents a premium of 108 percent to Enodis's closing price on April 8, the day before it entered into an offer period.

Manitowoc called on Enodis's directors to recommend unanimously that shareholders vote in favor of the improved offer, which is conditional on approval by U.S. and European antitrust authorities.

Manitowoc said it has committed funds to finance the increased offer from its backers JP Morgan, Deutsche Bank, Morgan Stanley and BNP Paribas.

It trades on a price/2008 earnings ratio of 14.2, compared with ITW on 17.2 and Enodis on 33.9.

(Additional reporting by Mark Potter and Mathieu Robbins; Editing by Louise Ireland/Elizabeth Fullerton/David Hulmes/Tim Dobbyn)