Packaging maker RPC Group PLC yesterday said it would buy British Polythene Industries PLC (BPI) for about ￡261 million (US$379 million) in a cash-and-stock deal, as it looks to gain a hold in the European polythene films market.
The offer of ￡9.40 per share, based on the average closing price of RPC’s stock over a month, represents a premium of about 30 percent to BPI’s closing price on Wednesday, RPC said in a statement.
BPI shares were up 32 percent at ￡9.54 at 7:35am in London yesterday, in line with the premium offered if calculated over RPC’s close on Wednesday. BPI stock was the top percentage gainer on the London Stock Exchange yesterday.
RPC has been on the prowl for deals in eastern and western Europe over the past few years, as the plastic packaging maker leads a consolidation in the industry that competes with glass, plastic and aluminum-based packaging products.
Asked whether RPC would pursue more deals, PRC chief executive Pim Vervaat said: “Yes, we have an active pipeline of acquisition activities.”
However, the company would be picky about what it buys, Vervaat said, adding that over the past five years, RPC had looked at about 250 acquisitions, but closed on only 12.
RPC, which supplies packaging for Beiersdorf’s Nivea skin creams and Nescafe coffee capsules, said each BPI shareholder would get, for each share held, ￡4.70 in cash and 0.60141 new RPC ordinary shares.
The deal, which is expected to close by mid-August, is to add to RPC’s earnings per share within the first financial year and be “materially accretive” within the second, it said.
The enlarged company is also expected to achieve ongoing pre-tax cost synergies of ￡10 million each year.
Vervaat said BPI had been on the company’s radar for a while and the deal would help RPC strengthen its polymer buying capabilities.
RPC plans to raise about ￡90 million through a placement of new ordinary shares to part-fund the deal.
RPC shares were up about 2 percent at ￡8.30 yesterday.
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