Merger of packaging companies
Packaging group BPI acquired in £261m offer
The offer values shares in Greenock-based BPI at 940p, representing a 30% premium on the 725p closing price last night.
BPI, whose board is recommending the offer, is one of Europe’s biggest producers of polythene films.
It supplies 275,000 tonnes per a year for a wide range of markets including agriculture and horticulture, industrial and consumer products, food and related packaging and recycled products.
It is also one of the largest recyclers of waste polythene film in Europe, having developed recycling techniques for processing a diverse range of scrap materials ranging from packaging waste to post-use agricultural waste.
RPC, based in Northampton, said the combination of the two companies creates “a unique strategic opportunity…with strong market positions.”
It expects £10 million of savings over two years.
Shareholders representing 20.75% of BPI’s issued share capital have given their backing to the deal.
RPC has recommended a dividend of 12.3p for the year ended 31 March which is due on 2 September.
The number of new RPC shares payable per BPI Share under the offer will be increased to 0.61102 of a new RPC share to give BPI shareholders the benefit of the RPC dividend.
RPC £90 is raising £90m through a placing to part fund the recommended cash and share offer
Each BPI shareholder will receive 470p in cash and 0.60141 new RPC ordinary shares.
Commenting on the offer, Cameron McLatchie, chairman of BPI, said: “The last five years have seen consistent improvements in BPI’s performance and prospects, but not all of this progress has been reflected in the price or rating of BPI’s shares.
“RPC has recognised the value inherent in our business and prospects by making an offer at an attractive premium to the share price. BPI’s business should benefit from the ability of a larger group to expand its footprint in Europe and beyond.
“Shareholders will benefit from enhanced liquidity for their investment, and employees will have access to the opportunities available in a larger group. The BPI board is therefore unanimously recommending acceptance of the offer.”
Pim Vervaat, chief executive of RPC, said: “With today’s announcement, RPC is taking another important step in delivering its Vision 2020 strategy.
“The proposed offer for BPI represents a compelling strategic opportunity for RPC to enter the European polythene films market through an established platform. BPI has a strong product portfolio with attractive market positions in its core markets in Europe.
“The combination will further broaden RPC’s range of polymer conversion technologies in line with global peers, establish a new growth platform with a strong cost synergy potential whilst enhancing the group’s overall polymer buying capability.
“I believe the combination of RPC and BPI is an excellent strategic fit and look forward to growing the enlarged platform to continue generating value for our customers and our shareholders.”