£668m TPG bid gets nod from British Vita

Quoted UK foam manufacturer British Vita has finally agreed to be taken private by Texas Pacific Group of the US at the fourth time of asking.

Texas Pacific Group (TPG) has won the support of British Vita’s board of directors with a 360 pence per share offer, valuing the company at £668 million (€960 million; $1.2 billion).

The latest offer is 31 percent higher than British Vita’s share price of 279 pence per share at close of business on February 1 2005, the day before British Vita said it had received a takeover approach.

TPG initially offered 325 pence per share for the company, followed by subsequent bids of 335 pence and – earlier this month – 353 pence. All three bids were rejected, with British Vita chairman David Cotterill insisting they undervalued the business and its prospects.

British Vita recently announced plans to return a special dividend of 100 pence a share to shareholders, a move that was widely interpreted as an attempt to fend off the private equity firm.

However, a Financial Times report in the wake of the third rejected bid said that one of the firm’s biggest shareholders – while acknowledging that the offer was not yet sufficient – nonetheless called for the company to open it books to TPG.

Manchester-based British Vita manufactures materials used in a wide range of everyday products, such as foam for furniture and non-wovens for disposable nappies. Customers include BMW, GE Medical and Epson

In a trading update in December, the company said that rising raw material costs were affecting its profit margins.