RBPE backs Expamet public-to-private offer

The group’s independent directors have recommended that shareholders accept the offer, saying it gives ‘the certainty of a cash offer now versus the uncertainty of an increase in shareholder value over time in challenging market conditions'.

Royal Bank Private Equity Limited (RBPE), the private equity arm of The Royal Bank of Scotland, is backing the management of Expamet International Plc in its £69m offer to buyout the building and engineering group. The Bank of Scotland will provide £46m of debt to support the transaction and £7.5m of working capital facilities.

RBPE and the Expamet management team are making the offer through a specially set up company, Clifton House Acquisition Limited. They are offering 108 pence per share, valuing the entire issued share capital of Expamet at approximately £69m. The offer represents a premium of approximately 13.7 per cent to the closing middle market price of 95 pence per Expamet share on 15 March 2001 – this being the last dealing day prior to the announcement of the offer.

The private equity firm's original offer was below Exponet's share price. eFinancial News quotes Duncan Johnson, investment director at RBPE, saying: “When we made our original offer we came up with our own valuation of the company, which we believed offered the best possible value for shareholders. We had to take into account that there was an element of bid premium in the share price at the time.”

Speaking on behalf of the independent directors, John Roberts, non-executive chairman of Expamet, commented: “The offer provides Expamet shareholders with the certainty of a cash offer now versus the uncertainty of an increase in shareholder value over time in challenging market conditions, and in the context of some uncertainty in world economies.”

Subject to the offer being accepted by shareholders, Richard Wilson, chief executive and Martin Taylor, finance director, will continue in their respective roles following the acquisition. Both will have an equity stake in the group.

Expamet was founded in the late 1880s and is split into three trading divisions. Expamet Building Products, Expamet Industrial Division and The Olaer Group. The group’s main UK operations are based in Hartlepool and Cwmbran.

Expamet’s preliminary results for the year ended 31 December 2000 report a turnover of £148m and profit after tax before exceptional items of £13.9m.