Greenock’s BPI agrees to be bought for £261m

The board of Greenock-based packaging firm British Polythene Industries (BPI) has agreed for the company to be bought by Northamptonshire-based plastics firm RPC Group for roughly £261 million in cash and shares.

The deal must now be approved by BPI shareholders “representing at least 75% in value of the BPI shares voted” and be approved by European Commission regulators.

RPC said BPI, one of Europe’s leading polythene films producers, was a “a unique strategic opportunity to acquire an established flexibles platform in the European polythene films market with strong market positions.”

RPC said BPI shareholders who control about 20.75% of stock have already given “irrevocable undertakings and a letter of intent” to accept the offer.

BPI chairman Cameron McLatchie 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.”

RPC said the offer values BPI at 940p per share based on the average closing price of 781.5p per RPC share for the one month period ended June 8, the last business day prior to the deal announcement.

RPC said the offer represents a premium of 30% to the 725p closing price of BPI shares on June 8.

RPC also said that based on the RPC share closing price of 815.5 p on June 8, the offer represents 960.4p per BPI share and a premium of 32% to the BPI closing price of 725p on June 8.

After the offer was announced on Thursday morning, BPI shares soared as high as 970p.

The offer consists of 470p in cash and 0.60141 of a new RPC share for every BPI share.

The cash portion of the offer will be part funded through an equity placing — a sale of new shares by RPC — to raise £90 million, with the balance funded through RPC’s existing banking facilities.

RPC chief executive Pim Vervaat said: 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.”

BPI is one of Europe’s leading polythene films producer which supplies 275,000 tonnes a year for a wide range of markets including agriculture and horticulture, industrial and consumer products, food packaging and recycled products.

BPI is also one of the largest recyclers of waste polythene film in Europe.