No, no and no again, British Vita tells TPG

US-based private equity firm Texas Pacific has completed an unwanted treble, with its third offer for British Vita rebuffed by the target’s board.

British Vita, the Manchester, UK-based foam rubber manufacturer, has risked upsetting shareholders after refusing for the third successive time to open its books to Texas Pacific Group, the US buyout house.

David Cotterill, British Vita chairman, said the latest offer of 353 pence per share continued to undervalue the company and its prospects. TPG’s offer, which values the business at £658 million (€946 million; $1.26 billion), comes after earlier bids of 325 pence per share and then 335 pence per share.

Today’s Financial Times quoted one of the firm’s biggest shareholders as saying: “We have suggested to the company that they open their books”. However, the source went on to say that the current offer was not high enough, and one investor in the same report speculated that a “bid ten percent higher might clinch it.”

The company has announced plans to return a special dividend of 100 pence a share to shareholders, a move widely perceived as an attempt to fend off the private equity firm.
TPG's latest offer did not include such a dividend. However, it did include the final year-end dividend of 6.25 pence per share that the company announced in its 2004 results on Monday.
The UK Takeover Panel has set a deadline of March 21 for TPG to make a firm offer.
British Vita manufactures products including furniture, nappies and military aircraft. Last autumn it announced that it was pursuing a strategy of growth through bolt-on acquisitions such as that of US-based polyurethane producer Tyrfil.
However, in a recent trading update in December the company said that rising raw materials costs were affecting profit margins.