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British Polythene (BPI)

British Polythene

Offer Rejection Document
British Polythene Industries PLC
23 October 2000

                British Polythene Industries PLC

Rejection document highlights financial benefits of restructuring

The  Board  of British Polythene Industries PLC ('BPI')  released
today its rejection document in response to the unsolicited offer
made by Macfarlane Group plc ('Macfarlane').  Since the launch of
the  hostile bid, BPI has steadfastly indicated that Macfarlane's
offer  undervalues BPI.  Today's document clarifies the reasoning
behind  the Board's unanimous rejection of what it regards  as  a
derisory offer.  The rejection is based on five key principles.

Macfarlane's offer:

-    fundamentally undervalues BPI;
-    discounts BPI's scale and market-leading positions;
-    is highly opportunistic;
-    ignores  the  benefits of actions already taken  by  BPI  to
     eliminate loss making businesses; and
-    ignores  the  benefits of actions already taken  by  BPI  to
     reduce costs.

The  rejection  document  sent  to  shareholders  explains  these
assertions  in  detail,  specifically  clarifying  the  financial
benefits  that can be expected from the accelerated restructuring
programme  BPI announced in February.  Actions already  taken  to
sell,  merge  or  close  loss  making operations  will  eliminate
operating  losses  which, in 1999, amounted to  £6  million.   In
addition to this, BPI's Board announced in May this year that  it
was  targeting £10 million in annual cost savings.  BPI  is  well
advanced  in achieving this target.  Actions already  taken  will
reduce  BPI's  annual  cost base by an  estimated  £5.1  million,
whilst consultations underway with employees at two plants should
result in annual cost savings of a further £2.7 million.  Further
actions to achieve the balance of the targeted savings have  been
planned for some months and will be announced before the  end  of
the  year.  Macfarlane's offer takes no account of these  actions
and  is timed to strike before their benefits are realised by BPI

In  its  offer document, Macfarlane asserts that 'companies  must
take decisive action to focus their businesses, rationalise their
activities and drive down costs' and then accuses BPI of  failing
to  address this challenge with adequate 'pace and vigour'.   The
extensive  actions  outlined above show that this  accusation  is
totally unfounded.

Cameron McLatchie, Chairman of BPI, said:

'In  February this year we announced an accelerated restructuring
programme  aimed at further improving the focus of our  business,
eliminating  loss  making  activities and  aggressively  reducing
costs.  These measures will result in substantial improvements to
our  business  and  will  deliver  significant  benefits  to  our

By  ignoring these benefits, Macfarlane is deliberately trying to
short-change our shareholders.  Their bid is highly opportunistic
and  takes  no  account  of the operational improvements  already
implemented and the resulting enhanced prospects for BPI.  It  is
totally inadequate and should be rejected outright.'


BPI             Cameron McLatchie, Chief    01475 501 000
Greenhill &     Simon Borrows               020 7440 0400
Financial       Tim Spratt                  020 7831 3113

Greenhill & Co. International Limited ('Greenhill & Co.'),  which
is  regulated in the United Kingdom by The Securities and Futures
Authority  Limited,  is  acting  for  BPI  and  no-one  else   in
connection with the offer, and will not be responsible to  anyone
other  than  BPI  for  providing  the  protections  afforded   to
customers of Greenhill & Co., or for providing advice in relation
to the offer.
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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