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British Polythene (BPI)

British Polythene

Tender Offer/Offer Update
British Polythene Industries PLC
21 November 2000

              British Polythene Industries PLC

          Proposed capital return at 320p per share

  Major institutional shareholders reject Macfarlane offer

Enhancing returns to shareholders

The Board of British Polythene Industries PLC ('BPI' or 'the
Company') announces today a proposal to return up  to  £35.4
million  to BPI shareholders through a tender offer  to  buy
back  30%  of  BPI's issued shares at a price  of  320p  per
share.  The buyback price represents a 28% premium over  the
Macfarlane offer price of 250p.

Shareholders will now have the option of benefitting  from  a
significant  return of capital, at a price substantially  in
excess  of  the  Macfarlane offer, as  well  as  the  upside
potential from continuing to hold BPI shares which will come

*     a  more  efficient  capital  structure,  resulting  in
      earnings per share enhancement*; and
*     the   benefits   of  the  accelerated   restructuring
      programme, under which actions that have already been 
      taken will:
       -    eliminate operating losses which, in 1999, 
            amounted to £6.4 million; and
       -    reduce  BPI's annual cost base by an estimated  
            £7.9 million out of a targeted annual cost saving 
            of £10 million.

The  figures  set  out  above relating  to  the  accelerated
restructuring  programme have been updated  to  reflect  the
progress that   BPI  has  made  since  its   circular   to
shareholders dated 23 October 2000.

The  proposed  return of capital reflects  the  BPI  board's
confidence in the accelerated restructuring programme and in
the future operating cashflows of BPI, and it highlights the
derisory  nature  of Macfarlane's offer.  The  tender  offer
will  be  made  only  if Macfarlane's offer  lapses  and  no
recommended  third party offer for BPI is  announced  on  or
before 16 December 2000.

The Directors  of  BPI  continue  to  advise  shareholders
strongly to reject Macfarlane's totally inadequate offer.

BPI  is today posting a document to its shareholders setting
out  why  Macfarlane's offer should continue to be  rejected
together with information on the proposed return of  capital
to shareholders.

Major shareholders reject Macfarlane offer and undertake not
to tender shares

Certain shareholders, including two of the company's largest
shareholders,   as  well  as  the  Directors,   have   given
undertakings in respect of an aggregate of 7,514,900 shares,
representing 20.4% of BPI's current issued share capital not
to  accept any offer for BPI shares at a price of less  than
320p per share in respect of 3,587,070 shares, and 310p  per
share   in   respect  of  3,927,830  shares  held   by   one
institution.  Clearly, these shareholders believe  the  real
value of BPI shares substantially exceeds Macfarlane's offer

In  addition,  these  shareholders have  given  undertakings
either  not  to  tender their BPI shares or restricting  the
number of BPI shares they may tender.  As a result of  these
undertakings, shareholders who tender up to 36.9%  of  their
holdings  can  expect  their tenders  to  be  met  in  full.
Tenders  in excess of 36.9% will be satisfied on a  pro-rata
basis to the extent that other shareholders tender less than
36.9% of their holdings.

Macfarlane  realises  that  BPI generates  strong  operating

Macfarlane   has   questioned  BPI's  future  profitability.
However,  it  is  clear  to BPI from Macfarlane's  financing
arrangements  for  the  offer  that  Macfarlane  shares  the
confidence of BPI's board in BPI's operating cashflows.   In
order to achieve financing at the same margin over LIBOR  as
BPI has arranged, an enlarged Macfarlane group would have to
achieve EBITDA of £88 million in 2001 and £106.5 million  in
2002.   However, Macfarlane reported EBITDA  of  only  £23.3
million  in  its 1999 annual report.  Macfarlane  recognises
BPI's potential; its offer does not.

Macfarlane can afford to pay more

Macfarlane has raised a financing facility of £230 million -
well in excess of that required to finance its offer.   This
indicates  that  Macfarlane  has  significant  capacity   to
increase its offer.

Furthermore,  Macfarlane has suggested that a  restructuring
charge  of £30 million, which is equivalent to over 80p  per
BPI  share,  is necessary.  BPI has already carried  out  an
extensive  restructuring  of its business  and  BPI's  board
fails  to  see  how  such further significant  restructuring
charges  could  be justified.  BPI's board is not  surprised
that  Macfarlane refuses to articulate its  plans  for  this
massive  charge,  and  believes  that  shareholders   should
question  the  nature of the charge.   If,  as  BPI's  board
believes  is the case, it is not necessary, then it  further
highlights  the  derisory nature of Macfarlane's  offer  and
suggests Macfarlane can afford to pay a significantly higher

Cameron McLatchie, Chairman of BPI, said:

'We  have  consistently  said  that  Macfarlane's  offer  is
opportunistic  and  significantly  undervalues   BPI.    Our
proposed capital return at 320p per share - 28% ahead of the
value  Macfarlane has placed on a BPI share -  confirms  our
view,  and  in hard cash.  What is more, two of our  largest
shareholders  are  also  turning  down  Macfarlane's  offer,
recognising  it  for what it is - derisory.   Macfarlane  is
trying to buy BPI on the cheap.

To  finance its bid Macfarlane needs BPI's strong  operating
cashflows.  Macfarlane quite clearly recognises the inherent
value  of  BPI  and  its  future potential  -  but  has  not
reflected this in its offer.'

The  tender offer will be subject to the approval  of  BPI's
shareholders.  Accordingly, an extraordinary general meeting
will  be  convened  following the  lapsing  of  Macfarlane's
offer.  It is expected that this meeting will take place  in
January 2001.

Greenhill & Co. International Limited ('Greenhill & Co.') is
acting  as financial adviser to BPI.  WestLB Panmure Limited
('WestLB  Panmure') and ING Barings Limited ('ING  Barings')
are  BPI's joint stockbrokers and will conduct the  proposed
tender offer on-market.


BPI             Cameron McLatchie, Chief    01475 501 000
Greenhill &     Simon Borrows               020 7440 0400
Financial       Tim Spratt                  020 7831 3113
WestLB Panmure  Keith Anderson              020 7638 4010
ING Barings     Richard Gray                020 7767 1000

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.   This
document  has  been  approved by Greenhill  &  Co.  for  the
purposes of Section 57 of the Financial Services Act 1986.

WestLB  Panmure and ING Barings, which are regulated in  the
United  Kingdom  by  The  Securities and  Futures  Authority
Limited,  are  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  WestLB Panmure and ING Barings, or for providing  advice
in relation to the offer.

*  This  is by comparison to the position in the absence  of
the tender offer.  This should not be taken to constitute  a
profit forecast.
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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