The good news just keeps on getting better for investors in British Polythene Industries (BPI), which just weeks after announcing improved trading and further consolidation plans has now attracted what looks to be a knockout offer from plastics and packaging specialist and fellow IC recommendation, RPC (RPC).
Shares in BPI surged by almost one-third on news of the cash and shares deal which will value the company at 940p a share, based on the 781.5p price of RPC's shares at last night's close. BPI investors can expect to receive 470p in cash and 0.6 RPC shares for every share they own in a deal which values the company at £261m. The board of BPI is recommending the deal.
Investors in RPC also reacted positively to the proposed deal by bidding its shares up 3 per cent, despite the fact that it is proposing a £90m placing to help fund the deal. The combination is expected to bolster RPC's Vision 2020 strategy which includes 'selective consolidation' in Europe. The acquisition of BPI is forecast to be accretive to RPC's earnings per share in the first full year of ownership and 'materially accretive' in the following year.
