BSS jumps 37 per cent on Travis Perkins buyout confirmation

Plumbing and Heating specialists BSS Group (LON:BTSM) has leaped to the peak of the FTSE 250 index this morning after Travis Perkins (LON:TPK) confirmed it was in advanced talks to buy the group for a fee of £553m.

Kate Neilson - Friday, May 28, 2010

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Travis Perkins is on the verge of buying BSS for £553m

Travis Perkins, the British builders’ merchant and home improvement retailer which own Wickes, has said it has made an indicative cash and share offer of 433p per share for the domestic plumbing and heating engineer firm. And BSS also confirmed it is prepared to accept the deal on the proposal basis, with the formal offer expect next month.

A statement from BSS said: “While the board of BSS remains confident in the stand-alone prospects for BSS, given the current volatility in the equity markets, the support of certain shareholders for the Indicative Offer and the significant scale benefits from a combination, the board of BSS would currently be prepared to recommend an offer by Travis Perkins to acquire the entire issued and to be issued share capital of BSS if made on the same terms as the Indicative Offer.”

With the deal looking as good as done, BSS’ share price soared to as much as 444.90p this morning, a gain of 120p or 37 per cent. And the deal hasn’t done any harm to Travis Perkins share price either – shares rose by 84p or 11.3 per cent to a high of 829p.

Once completed, the deal would create the UK’s leading plumbing and heating trade distribution business and Travis Perkins announced it would fund the deal using existing facilities, inspiring confidence for the group’s shareholders.

The pair head the FTSE 250 risers chart this morning followed by TalkTalk (LON:TALK) which is up over seven per cent, Gailform (LON:GFRM) which is over five per cent up and Daejan Holdings (LON:DJAN) with a growth in excess of four per cent.

The mid-cap index is up 0.9 per cent with an 87p gain to 9,734.31 at 11:00BST.


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