3rd Aug 2005 07:20
BPB PLC03 August 2005 3 August 2005 BPB plc ("BPB") BPB rejects Saint-Gobain's unsolicited proposal of a possible offer BPB announces a £350m return of capital and significantly increased dividends BPB plc ("BPB") announces that on Monday 1 August 2005, at the request ofSaint-Gobain, Sir Ian Gibson, Chairman of BPB, had a further meeting with M. Beffa, Chairman and Chief Executive of Saint-Gobain. At that meeting no firmproposal with regard to a possible offer for BPB was tabled by M. Beffa. Subsequent to that meeting, the Board of BPB (the "Board") yesterday received anunsolicited proposal of a possible offer (the "Proposal") from Saint-Gobain forBPB at 720p per share in cash. The Board strongly believes that this unwelcome Proposal continues tosubstantially undervalue the unique position of BPB, its underlying strategicvalue and attractive growth prospects. Therefore, were an offer to be made atthis level, the Board would have no hesitation in advising shareholders toreject it. BPB has been experiencing favourable trading conditions for some time and theBoard has been actively considering means of returning capital to BPBshareholders. To facilitate a special return of capital it would be necessary toundertake a capital reorganisation and measures have been underway for severalmonths to achieve this objective. The Board believes that, following this unwelcome Proposal from Saint-Gobain, itwould be appropriate to bring forward the announcement of its plans to returncapital to shareholders and its intention to increase significantly its annualdividend, whilst maintaining its strategy for growth and future capitalinvestment. BPB intends to effect a capital return of just over £350 million as soon aspracticable following the end of the offer period. Subject to any necessaryshareholder approval and the other requirements set out in the Appendix, BPBshareholders on the register as at the relevant record date will be entitled toreceive a capital return of 70p per share. Taking account of this return ofcapital, BPB's proforma 31 March 2005 net debt/EBITDA would have been 2.0x withEBITA/net interest cover around 7.4x. Further details of this return of capitalwill be provided in due course. BPB has seen underlying profit before tax grow by almost 90 per cent over thelast three years and is strongly cash generative. The Board, therefore, intendsto recommend a total cash annual dividend of 23p per BPB share in respect of theyear ending 31 March 2006 of which 8p would be paid as the interim dividend inJanuary 2006. This would represent an increase of approximately 44 per cent onthe total dividend paid in respect of the year ended 31 March 2005. The Boardintends that the proposed 23p total annual dividend for the year ending 31 March2006 would form the base for future dividend policy. The Directors of BPB have received financial advice from Rothschild. Inproviding this advice, Rothschild has placed reliance on the commercialassessment of the Directors. In the meantime, BPB shareholders are strongly urged to take no action inrelation to their BPB shares. This announcement is made without Saint-Gobain's consent. There can be nocertainty that an offer will be made nor as to the terms on which any offermight be made. EnquiriesJames Murgatroyd, FinsburyTel: +44 (0)20 7251 3801 APPENDIX The return of capital described above is conditional, inter alia, on: - The offer period relating to BPB ending without any offer for BPB becoming or being declared unconditional as to acceptances;- Any necessary BPB shareholder approval and any other applicable legal or regulatory requirements;- Completion of the current capital restructuring of the BPB group, involving a Court approved reduction of capital of a new subsidiary holding company establishing additional distributable reserves, which is subject to Court approval at a hearing to be held on 14 September 2005, and the payment up to BPB by way of dividend of such amount of those reserves as is appropriate to facilitate the return of capital; and- Completion of documentation enabling the intra group transfer of existing financing arrangements. Sources and bases:The historic financial information relating to BPB (including in respect ofdividends) in this announcement is based on information contained in BPB'sannual report and accounts for the year ended 31 March 2005, and the financialinformation for the year ended 31 March 2005 re-stated under IFRS published byBPB on 8 July 2005. N M Rothschild & Sons Limited ("Rothschild"), which is authorised and regulatedin the United Kingdom by the Financial Services Authority, is acting for BPB andno-one else in connection with the matters referred to herein and will not beresponsible to anyone other than BPB for providing the protections afforded toclients of Rothschild or for giving advice in relation to such matters. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Saint Gobain Or