By Liz White, ERJ staff
London-Texas Pacific Group has finally succeeded in its bid to buy UK-based polyurethane foam, plastics and fibres group British Vita plc.
Following several weeks since mid-January during which Vita continued to rebuff the US-based private equity group's approaches, a 22 March announcement said the Vita board had recommended that shareholders accept TPG's fourth offer, which values the group at Â£668 million ($1268 million).
Vita shareholders will get Â£3.60 cash for each share (ex the final 6.25 pence dividend for 2004, which will be paid as previously announced by British Vita).
â€œBritish Vita is proud of its track record of delivering shareholder value, and the board is pleased that it has been able to continue this by agreeing a deal with TPG UK which it believes delivers fair value to shareholders today for the business and its prospects,â€ said David Cotterill, the Vita chairman, in a Regulatory News Service statement.
â€œTPG UK will take control of a well-run, cash-generative business which is well placed to take advantage of the opportunities offered by the markets which it serves,â€ Cotterill added.
TPG expressed its delight â€œthat the directors of British Vita have unanimously recommended our offer. TPG is excited about backing British Vita, a company with such strong underlying businesses and market positions,â€ said Stephen Peel, partner of TPG in London, in the RNS statement.
Added to the final dividend, shareholders gain a premium of 40 percent over the 262 pence which Vita's shares were trading at 11 Jan, immediately before TPG's first proposal.
Discussing TPG's earlier bids in London on 7 March, Vita's chief executive David Campbell said they undervalued Vita â€œbased on prospects and investments. â€œThe business has a strong balance sheet,â€ Campbell said, but said TPG, â€œseeks to take advantage of the adverse impact of raw materials prices on British Vita.â€
As part of Vita's defence against TPG, it announced a shareholders' payout of Â£1 per share-a total of Â£185 million, adding to the Â£108 million it has given back in the last four years.
â€œI believe we run the business well,â€ Campbell said, adding that the group aims for continuous improvement, constantly looking to run it better.