(Reuters) – Berry Global Group is considering a cash offer for British packager RPC Group in a challenge to a 3.3 billion pound ($4.33 billion) bid from the U.S. company’s former parent, Apollo Global.
Plastics maker Berry Global said it had requested due diligence information on RPC, Europe’s biggest plastic packaging company.
Apollo offered to acquire RPC last week after months of negotiations, marking the latest M&A deal in the consolidating packaging sector.
RPC’s shares were up 4.6 percent at 800 pence at 0827 GMT, well above Apollo’s offer of 782 pence per share.
Apollo’s offer represented a premium of 15.6 percent to RPC’s closing price on Sept. 7, the day before reports of takeover interests emerged.
“The current offer from Apollo … probably disappointed many investors. A lowball offer certainly leaves the door open to a rival bidder,” Nicholas Hyett, an analyst at Hargreaves Lansdown, told Reuters.
“An industry buyer, like Berry, would be best placed to make a higher number stack up. A listed player could pay in a mixture of equity and cash – meaning a higher offer may not require substantially more debt than the Apollo deal,” he said.
Aviva Investors, which owns a 1.93 percent stake in RPC according to Refinitiv Eikon data, has said it does not agree with the terms of Apollo’s offer.
RPC, a FTSE listed mid-cap company, ended takeover talks with Bain Capital, another U.S. private equity firm, in December.
Apollo and RPC did not respond to requests for immediate comment.
(Graphic: Apollo offer fails to cheer RPC investors – tmsnrt.rs/2SffFPf)
RPC was founded in 1999 and produces a range of products from coffee capsules to healthcare products in 34 countries.
Berry Global makes plastic containers, prescription vials and adhesives. Apollo and Graham Partners bought it in 2006 and it was listed in 2012.
The packaging sector has seen a series of recent takeovers as investors are drawn to reliable cashflow underpinned by strong demand from online shopping.
Goldman Sachs and Wells Fargo are joint financial advisers to Berry.
($1 = 0.7614 pounds)
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Home » Analysis & Comment » Berry Global mulls bid for packager RPC in challenge to Apollo
Berry Global mulls bid for packager RPC in challenge to Apollo
(Reuters) – Berry Global Group is considering a cash offer for British packager RPC Group in a challenge to a 3.3 billion pound ($4.33 billion) bid from the U.S. company’s former parent, Apollo Global.
Plastics maker Berry Global said it had requested due diligence information on RPC, Europe’s biggest plastic packaging company.
Apollo offered to acquire RPC last week after months of negotiations, marking the latest M&A deal in the consolidating packaging sector.
RPC’s shares were up 4.6 percent at 800 pence at 0827 GMT, well above Apollo’s offer of 782 pence per share.
Apollo’s offer represented a premium of 15.6 percent to RPC’s closing price on Sept. 7, the day before reports of takeover interests emerged.
“The current offer from Apollo … probably disappointed many investors. A lowball offer certainly leaves the door open to a rival bidder,” Nicholas Hyett, an analyst at Hargreaves Lansdown, told Reuters.
“An industry buyer, like Berry, would be best placed to make a higher number stack up. A listed player could pay in a mixture of equity and cash – meaning a higher offer may not require substantially more debt than the Apollo deal,” he said.
Aviva Investors, which owns a 1.93 percent stake in RPC according to Refinitiv Eikon data, has said it does not agree with the terms of Apollo’s offer.
RPC, a FTSE listed mid-cap company, ended takeover talks with Bain Capital, another U.S. private equity firm, in December.
Apollo and RPC did not respond to requests for immediate comment.
(Graphic: Apollo offer fails to cheer RPC investors – tmsnrt.rs/2SffFPf)
RPC was founded in 1999 and produces a range of products from coffee capsules to healthcare products in 34 countries.
Berry Global makes plastic containers, prescription vials and adhesives. Apollo and Graham Partners bought it in 2006 and it was listed in 2012.
The packaging sector has seen a series of recent takeovers as investors are drawn to reliable cashflow underpinned by strong demand from online shopping.
Goldman Sachs and Wells Fargo are joint financial advisers to Berry.
($1 = 0.7614 pounds)
Source: Read Full Article