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.