Swiss packager rejects CVC offer

CVC Capital Partners and Norway’s Ferd have had a CHF325 per share unsolicited offer for SIG rejected by the Swiss packaging firm’s board of directors.

SIG, a listed Swiss packaging business, has rejected a CHF325 per share unsolicited offer from CVC Capital Partners, a global private equity firm, and Ferd, the Norwegian parent of the Elopak packaging group.
 
SIG released details of CVC and Ferd’s offer, which included the granting of exclusivity and the possible raising of the offer to CHF350 per share, provided the potential buyers were given the opportunity to carry out a due diligence review.
 
The terms of the offer give SIG a market value of between CHF2.11 billion and CHF2.28 billion (€1.3 billion and €1.44 billion).
 
At CHF350 per share, the offer represents a premium of 22.4 percent to SIG’s average opening price for the 30 days prior to release of its half-year results on August 22, and a multiple of 18.3 times its EBIT.
 

SIG’s share price over the last month

At 9.30am BST today, SIG shares were trading at CHF345.50 per share, the same price as at close of trading yesterday.
 
CVC and Ferd said in the offer letter that they already had “committed debt and equity funding in place” and would only require due diligence for the higher bid on the basis that a review might find that the lower offer price does not represent a “financially adequate” price.
 
“As the owner of one of the leading players in the liquid paper board packaging industry, Ferd and its partner CVC have limited requirements for further due diligence as we have already invested considerable time and resources in understanding the SIG business model and analysing publicly available information,” the bidders said in the offer letter.
 
SIG said it had rejected the offer as “inadequate and too low”. The company said that, in view of earlier indications of interest, however, interested parties including CVC and Ferd should be given an opportunity to evaluate an acquisition.
 
SIG also said that its board of directors had approached Ferd with regard to a possible acquisition of Elopak.
 
SIG’s product range includes the manufacture of cartons for drinks and food products, as well as machinery for the aseptic and non-aseptic filling of packages. Based in Neuhausen am Rheinfall, the company has approximately 4,800 employees and reported annual net sales of €1.2 billion in 2005.
 
CVC was not immediately available for comment.