TPG comes back for British Vita

Texas Pacific has made an increased indicative offer for the London-listed foam rubber manufacturer that rejected the private equity firm’s advances last month.

Texas Pacific Group has made a revised indicative cash offer of 353 pence per share for British Vita. The bid values the company at a total of £658 million (€946 million; $1.26 billion), and represents a 35 percent premium on the final trading price on the London Stock Exchange immediately before the offer was announced. The company has yet to respond.
 
British Vita first announced on February 2nd that it had rejected an offer from an unnamed suitor on the grounds that it undervalued the company. The next morning Texas Pacific revealed its identity and announced a revised offer of 335 pence per share. The share price rocketed following the announcement, overtaking the offer by more than 10 pence, and on February 4th TPG's bid was rejected once again.
 
The company has since 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 does not include such a dividend. However, it does 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.