Europe’s largest plastic packaging manufacturer RPC Group has announced it has accepted a £3.32 billion takeover offer from US-based private equity firm Apollo Global Management following months of negotiations.
Last September, RPC confirmed that it was holding talks with Apollo as well as Bain Capital, with the latter firm eventually walking away in November.
The deal represents the latest mergers and acquisitions deal for an industry that appears to be undergoing a phase of consolidation. The acquisition also highlights how this sector’s reliable cashflow, underpinned by the high demand in online shopping is proving very attractive to investors.
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Leon Black, Chairman, CEO and Director, Apollo Global Management, LLC, May 1, 2018. REUTERS/Lucy Nicholson/File Photo
RPC produce a wide range of packaging for products including coffee capsules, beverages and healthcare products. The company operates in 33 countries and employs around 25,000 people.
The offer from Apollo, of 782 pence per share, represents an increase of 15.6% on RPC’s closing price on 7 September 2018, the previous trading day before the offer period started.
However, not all shareholders are happy with the deal. Aviva Investors, which owns a 1.93% stake in RPC expressed disagreement with the terms of Apollo’s offer. David Cumming, chief investment officer at the firm, said: “We do not agree with the justifications put forward by the board for their acceptance of an offer by Apollo… In our view, this protracted bid process has not delivered fair value to RPC’s shareholders.”
It has been previously suggested that the offer price could have been much higher than the final agreed one. While it is still possible that a higher rival bidder could emerge, with proposed new regulations around single-use plastic packaging in the UK and the EU, not to mention global economic uncertainty, analysts believe it unlikely.
RPC Group released a statement saying "the Board believes that the offer of £7.82 per share is a good outcome for shareholders and intends to recommend unanimously that they accept this offer. Today's announcement is the culmination of that process."
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