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British Polythene (BPI)

British Polythene

Offer by Macfarlane - Part 1
British Polythene Industries PLC
21 September 2000


PART ONE

                               
  NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
                        UNITED STATES,
      CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND OR JAPAN

                              
        CASH OFFER FOR BRITISH POLYTHENE INDUSTRIES PLC
               BY NOBLE GROSSART LIMITED ON BEHALF OF
                     MACFARLANE GROUP PLC

The  board of Macfarlane announces the terms of a cash  offer,
to  be made by Noble Grossart, for the entire issued and to be
issued share capital of BPI not already owned by Macfarlane.

     The  Offer  is 250 pence in cash for each BPI  share  and
     values  the  existing  issued share  capital  of  BPI  at
     approximately £92.3 million.

     In  addition  BPI  shareholders will  still  receive  the
     interim dividend of 7.0 pence announced on 11th September
     2000.

     The  Offer represents a premium of approximately  40  per
     cent. over the closing middle market price of a BPI share
     of 178.5 pence on 5th September 2000, the last dealing day
     prior  to  the  announcement by BPI that it had  received
     approaches regarding a possible offer.

     The  Offer represents a premium of approximately 14.9 per
     cent. over the closing middle market price of a BPI share
     of  217.5 pence on 20th September 2000, the last  dealing
     day prior to this announcement.

John Ward, Chairman of Macfarlane, said:

'The combination of Macfarlane and BPI represents an
opportunity to create a business of significant scale and
capability in European terms.  We believe strongly that this
will be of benefit to shareholders and customers.

Our Offer gives BPI shareholders the opportunity to exit in
cash from an underperforming investment at a  premium of 40
per cent. over the BPI share price on 5th September 2000, the
day prior to the announcement by BPI that it had received
approaches regarding a possible offer. We have made contact
with the board of BPI and we hope that it will recommend our
Offer'.


This  summary should be read in conjunction with the full text
of the following announcement.

Press enquiries:

Bell Pottinger                                  020 7353 9203
David Rydell
Kate Power

Beattie Media                                    01698 787878
Gordon Beattie

Enquiries:

Macfarlane                                       0141 333 9666
Iain Duffin, Chief Executive

Noble Grossart                                   0131 226 7011
Sir Angus Grossart

HSBC                                             020 7336 9000
John Hannaford


Noble Grossart, which is regulated in the UK by The Securities
and Futures Authority Limited, is acting for Macfarlane and no
one else in connection with the Offer, and will not be
responsible to anyone other than Macfarlane for providing the
protections afforded to customers of Noble Grossart, or for
providing advice in relation to the Offer.

The  Offer will not be made directly or indirectly in or  into
or  by  use of mails, or by any other means or instrumentality
of  interstate  or  foreign commerce, or  any  facility  of  a
national  securities exchange, of the United  States,  Canada,
Australia,  the  Republic of Ireland or  Japan.   Accordingly,
this  announcement  is  not being, and must  not  be,  issued,
mailed  or otherwise distributed or sent in, into or from  the
United  States, Canada, Australia, the Republic of Ireland  or
Japan.


                               
  NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
                        UNITED STATES,
      CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND OR JAPAN

21ST SEPTEMBER 2000

                               
        CASH OFFER FOR BRITISH POLYTHENE INDUSTRIES PLC
               BY NOBLE GROSSART LIMITED ON BEHALF OF
                     MACFARLANE GROUP PLC

1.   Introduction

     The  board  of Macfarlane announces the terms of  a  cash
     offer for BPI.  The Offer will be made by Noble Grossart,
     on  behalf of Macfarlane, for all of the issued and to be
     issued  share  capital  of  BPI  not  already  owned   by
     Macfarlane.

     The  Offer is 250 pence in cash for each BPI share  which
     values  the  existing  issued share  capital  of  BPI  at
     approximately £92.3 million and represents a  premium  of
     40  per cent. over the middle market price of a BPI share
     on  5th September 2000, the day prior to the announcement
     by  BPI  that  it  had  received approaches  regarding  a
     possible  offer and a premium of approximately  14.9  per
     cent  over the closing middle market price of 217.5 pence
     on  20th  September 2000, the last dealing day  prior  to
     this  announcement.   In addition BPI  shareholders  will
     still receive the interim dividend of 7.0 pence announced
     on 11th September 2000.

     Macfarlane  has made contact with the board  of  BPI  and
     hopes that it will recommend this Offer.

2.   The Offer

     On behalf of Macfarlane, Noble Grossart will offer to
     acquire all the issued and to be issued BPI shares
     subject to the conditions set out in Appendix 1 and on
     the following basis:

          for each BPI share          250 pence in cash

     The Offer values the entire existing issued share capital
     of BPI at approximately
     £92.3 million.  The Offer represents a premium of
     approximately 40 per cent. over the closing middle market
     price of a BPI share of 178.5 pence on 5th September 2000,
     the last dealing day prior to the day of the announcement
     by BPI that it had received approaches regarding a
     possible offer and a premium of approximately 14.9 per
     cent. over the closing middle market price of a BPI share
     of 217.5 pence on 20th September 2000, the last dealing
     day prior to this announcement.

     The  BPI shares to be acquired pursuant to the Offer will
     be  acquired fully paid and free from all liens, charges,
     encumbrances  and other interests and together  with  all
     rights  attaching thereto, including (without limitation)
     the  right to receive and retain all dividends and  other
     distributions  (if any) declared, made or paid  hereafter
     except  that BPI shareholders who accept the  Offer  will
     retain  the right to receive the interim dividend of  7.0
     pence declared on 11th September 2000 and payable by  BPI
     on 27th November 2000 to shareholders on the BPI register
     at the close of business on 3rd November 2000.

     Full acceptance of the Offer would involve a maximum cash
     payment of approximately £92.3 million.

     Noble  Grossart  is  satisfied that  Macfarlane  has  the
     necessary  financial  resources,  which  have  been  made
     available  from  new  banking  facilities,  for   it   to
     implement the Offer in full.

3.   Shareholding in BPI

     At  20th  September  2000, Macfarlane owned  325,000  BPI
     shares  representing approximately 0.9 per cent.  of  the
     issued shared capital of BPI.

4.   Background to and reasons for the Offer

     Macfarlane is a major UK based manufacturer of packaging
     and provider of packaging solutions and related services,
     including warehousing and distribution.  Over the last
     fifteen months Macfarlane has restructured its business
     from fifteen autonomous operating entities into four
     focused divisions.

     This restructuring programme has encompassed six site
     closures and the divestment of two non-core businesses.
     In Macfarlane's plastics division, restructuring of its
     UK business has led to the integration of seven separate
     sites into one organisation and a further two
     acquisitions have been undertaken.  Integration and more
     effective management together with a unified sales force
     and systems across the business have already delivered
     efficiencies.

     Macfarlane's four operating divisions comprise:

          Merchanting - supply and distribution of a wide
     range of packaging.

          Packaging - manufacture and distribution of
          specialist packaging.
     
          Plastics - manufacture and distribution of polythene
          film based products.
     
          Labels - manufacture of printed self-adhesive
          labels.

     Macfarlane's board and management have been extensively
     changed and significantly strengthened over the last
     eighteen months. Macfarlane has built a management team
     with the skills and drive to run a business of greater
     scale than that of Macfarlane presently with the
     objective of delivering shareholder value by achieving
     double digit earnings growth on a consistent basis.

     As part of the group's strategic review it has identified
     the acquisition of BPI as an opportunity to deliver
     shareholder value by acquiring, integrating and
     developing the largest European manufacturer of polythene
     film whilst consolidating both companies' merchanting and
     packaging businesses into one operation.

     BPI is the largest European polythene film manufacturer
     in terms of scale but Macfarlane believes BPI has failed
     to realise the efficiencies, profitability and growth its
     industry leadership position should have allowed.

     The board of Macfarlane believes that there is an
     opportunity by merging the two businesses to create an
     organisation which is more able to compete effectively in
     European markets and to deliver the level of service
     which increasingly large and sophisticated customers
     require.

     Macfarlane intends, following the acquisition of BPI,  to
     integrate  the  two companies' packaging and  merchanting
     activities  into  one  division. This  service  solutions
     division  will provide a range of packaging solutions  to
     businesses,  primarily  in the UK,  but  with  operations
     capable  of  expansion both in Europe and North  America.
     Macfarlane's existing labels operation will  continue  to
     operate as a separate business activity.

     It is Macfarlane's intention to create three focused
     business units within the enlarged plastics division:
     Industrial, Film and Retail.  As part of this
     realignment, substantial restructuring will be required
     with costs, including asset writedowns, estimated at up
     to £30 million over two years.  Macfarlane has developed
     a comprehensive integration plan to be implemented by a
     management team led by Iain Duffin, chief executive of
     Macfarlane.
     
     The directors of Macfarlane expect the acquisition of BPI
     to be strongly enhancing* to Macfarlane's earnings per
     share both before and after the amortisation of any
     goodwill from the first full year following the
     acquisition.
     
     The directors of Macfarlane expect that the combined
     business will benefit from:

     -    more effective manufacturing and more efficient
          asset utilisation through site closures and
          consolidation;
     
     -    reduction of overheads at corporate and divisional
          level;
     
     -    a more streamlined and coherent sales strategy
          through the creation of the three focused business
          units within the plastics division;
     
     *as compared to the Macfarlane board's expectation of
     earnings per share on the basis that the acquisition of
     BPI were not to take place

     -    enhanced purchasing scale; and
     
     -    the addition of BPI's European and Far Eastern
          operations to Macfarlane's existing European and US
          operations which will provide a solid platform to
          enable Macfarlane to continue its international
          expansion.

5.   Information on BPI

     BPI is the largest polythene film manufacturer in the UK
     and Europe.

     In the year ended 31st December 1999, BPI recorded
     turnover of £452 million (1998 - £470 million), profit
     before tax of £19.3 million (1998 - £21.6 million) and
     basic earnings per share of 32.1 pence (1998 - 36.2
     pence) based on the weighted average number of ordinary
     shares in issue throughout the year of 40,190,673 (1998 -
     40,996,676).  Net assets as at 31st December 1999 were
     £101.6 million.

     At  the  Annual General Meeting of BPI, held on 11th  May
     2000,  Cameron  McLatchie, chairman and chief  executive,
     made a statement which included the following:

     'As we indicated in our preliminary results announcement
     and in our Annual Report, trading conditions for UK
     manufacturers continue to be difficult.  With the current
     strength of Sterling our competitive position on both
     exports and imports continues to decline.  The ever
     increasing costs of energy and transport, and the growing
     burden of regulation, continue to bear down on the UK
     manufacturing industry.

     'These factors affect many businesses in your Group and
     also a number of our customers, whose trading is exposed
     to similar pressures.  Therefore, despite managing to
     retain our overall market share, our margins are
     continually under pressure.  This is particularly the
     case in high value added products, where this added value
     is attractive to foreign competitors, who are now
     challenging on the basis of their ever more competitive
     pricing in Sterling.

     'As a result of these extremely difficult trading
     conditions, we now expect that our operating profits for
     the first six months will be significantly down on the
     comparative period for last year.  We expect these
     conditions to continue which will lead to a similar
     shortfall in the second half of the year, leaving the
     profit for the year as a whole well below the 1999
     figure.'

     BPI announced its interim results on 11th September 2000.
     These  results showed turnover in the six months to  30th
     June 2000 increasing to £234 million (1999: £227 million)
     whilst  profit before tax fell from £11.1 million in  the
     six  months  to  30th June 1999 to £4.8  million  in  the
     current  year.   Net assets at 30 June 2000  were  £101.8
     million (1999: £118.8 million).

     Commenting  within  the interim results  on  BPI  group's
     trading, the chairman of BPI stated:

     'We   continue  to  be  faced  with  challenging  trading
     conditions.  The comparative strength of sterling against
     the  euro continues and although we have seen some recent
     sign  of  polymer prices weakening slightly, the prospect
     of  these reductions is being tempered by the strength of
     oil   prices.   Our  overall  volumes,  excluding  silage
     stretch,  have slightly exceeded 1999.  Abnormal  weather
     conditions throughout Europe and financial caution in the
     farming community in the UK, lead to a reduction in sales
     of  silage  stretchwrap.  Margins on  export  sales  were
     reduced, particularly into Ireland and Scandinavia.'

     Commenting on the BPI group's prospects for the remainder
     of the current financial year, the chairman of BPI stated
     that  the  board expected that there would  be  '  little
     change  in  conditions from the first half,  but  with  a
     higher level of exceptional restructuring costs.'

6.   Information on Macfarlane

     Macfarlane  is  a major manufacturer and  distributor  of
     packaging   solutions  and  related  services,  including
     warehousing and distribution.  The company has operations
     across the UK, in Europe and in the USA.

     Macfarlane  has  developed  its  plastics  division  both
     organically and through acquisition such that in the half
     year  to  30th June 2000 it represented 32 per  cent.  of
     Macfarlane's  turnover  and 39  per  cent.  of  operating
     profit.

     In  the  year  to 31st December 1999, Macfarlane  group's
     turnover  from  continuing operations  was  £196  million
     (1998  -  £192  million) and profit before tax  was  £2.6
     million (after exceptional items totalling £11.5 million)
     (1998 - £15.1 million).  As at 31st December 1999 the net
     assets  of  Macfarlane group were £67.7 million  (1998  -
     £74.4 million).

     The  unaudited interim results of Macfarlane  group  were
     announced  on  23rd August 2000.  For the six  months  to
     30th  June 2000, turnover was £98.2 million (1999 - £91.3
     million) and profit before tax was £7.2 million  (1999  -
     £6.0  million).  Unaudited net assets at 30th  June  2000
     were £70.4 million (1999 - £76.3 million).

7.   Management and employees

     On  the Offer becoming or being declared unconditional in
     all  respects, the existing employment rights,  including
     pension  rights, of all the employees of  the  BPI  Group
     will be fully safeguarded.

8.   BPI Share Schemes

     The  Offer  will  extend  to any  BPI  shares  which  are
     unconditionally  allotted or issued and  fully  paid  (or
     credited  as fully paid) prior to the date on  which  the
     Offer closes (or such earlier date(s) as Macfarlane  may,
     subject  to the Code, decide) as a result of the exercise
     of  options  under  the BPI Share Schemes  or  otherwise.
     Macfarlane will make appropriate proposals to holders  of
     options under the BPI Share Schemes.

     Further  details of these proposals will be sent  to  BPI
     option holders in due course.

9.   General

     The Offer will be made subject to the conditions and on
     the terms contained in Appendix 1 to this announcement
     and on the further terms which will be set out in the
     formal Offer Document and the Form of Acceptance.  The
     Offer will comply with the rules and regulations of the
     UKLA and City Code.

     The formal Offer Document setting out the details of the
     Offer, together with the Form of Acceptance, will be
     despatched by Noble Grossart, on behalf of Macfarlane, to
     BPI shareholders.

     The conditions set out in Appendix 1 include the approval
     of the shareholders of Macfarlane and the board of
     Macfarlane intends to convene an extraordinary general
     meeting to put the necessary resolutions to shareholders.

     If Macfarlane receives sufficient acceptances under the
     Offer, and the Offer becomes or is declared unconditional
     in all respects, Macfarlane intends to exercise its
     rights under sections 428 to 430F of the Act, to acquire
     compulsorily any outstanding BPI shares.

     As soon as it is appropriate and practicable to do so and
     subject   to   the  Offer  becoming  or  being   declared
     unconditional  in  all  respects, Macfarlane  intends  to
     procure  an application for cancellation of BPI's listing
     of  its  shares  on the Official List and  to  propose  a
     resolution to re-register BPI as a private company  under
     the relevant provisions of the Act.

     Appendix  2 contains definitions of words and expressions
     used in this announcement.

     HSBC is acting as broker to Macfarlane.

10.  Responsibility statement

    The directors of Macfarlane accept responsibility for the
     information contained in this announcement save that the
     only responsibility accepted by them in respect of the
     information contained in this announcement relating to
     BPI, the BPI Group and the directors of BPI, which has
     been compiled from publicly available sources, has been
     to ensure that such information has been correctly and
     fairly reproduced and presented.  To the best of the
     knowledge and belief of the directors of Macfarlane (who
     have taken all reasonable care to ensure that such is the
     case), the information contained in this announcement for
     which they accept responsibility is in accordance with
     the facts and does not omit anything likely to affect the
     import of such information.

Press enquiries:

Bell Pottinger                                  020 7353 9203
David Rydell
Kate Power

Beattie Media                                    01698 787878
Gordon Beattie

Enquiries:

Macfarlane                                       0141 333 9666
Iain Duffin, Chief Executive

Noble Grossart                                   0131 226 7011
Sir Angus Grossart

HSBC                                             020 7336 9000
John Hannaford


Noble Grossart, which is regulated in the UK by The Securities
and Futures Authority Limited, is acting for Macfarlane and no
one else, in connection with the Offer, and will not be
responsible to anyone other than Macfarlane for providing the
protections afforded to customers of Noble Grossart, or for
providing advice in relation to the Offer.

The  Offer will not be made directly or indirectly in or  into
or  by  use of mails, or by any other means or instrumentality
of  interstate  or  foreign commerce, or  any  facility  of  a
national  securities exchange, of the United  States,  Canada,
Australia,  the  Republic of Ireland or  Japan.   Accordingly,
this  announcement  is  not being, and must  not  be,  issued,
mailed  or otherwise distributed or sent in, into or from  the
United  States, Canada, Australia, the Republic of Ireland  or
Japan.

This  announcement does not constitute an offer or  invitation
to purchase any securities.


MORE TO FOLLOW
Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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