The majority shareholder of packaging producer Bonar Inc. plans to buy up the 21 percent of the company it does not own in a share offering worth C$39 million (US$28.9 million). Low & Bonar plc of Dundee, Scotland, said 63 percent of minority shareholders agreed to the C$38 (US$28.1) per-share offer, about 60 percent higher than recent prices for Bonar's thinly traded shares.
Bonar, based in Burlington, Ontario, produces plastic film and bags, multiwall paper bags, folding cartons and rotomolded products at seven plants in Canada and four in the United States.
One shareholder said Low & Bonar wants all of the firm because Bonar's growth potential is enhanced by an expansion of its Tyler, Texas, film and bag plant and by implementation of the North American Free Trade Agreement.
``Bonar is their vehicle in North America,'' said Bob Tattersall, portfolio manager of Howson Tattersall Investment Counsel Ltd. of Toronto, which holds about a fifth of Bonar's 1 million minority shares.
Tattersall said institutional investors, such as pension plans, own most of Bonar's minority shares.
Bonar officials were unavailable to comment on the Tyler expansion or other details of the company.
In its 1994 annual report, Bonar said Tyler completed a major capital expansion in 1994 that continues to boost production volume. It also noted plans to add a new, three-layer film coextrusion line at the Calgary, Alberta, facility. Last year, Bonar swapped its extrusion coating and laminating business to Twinpak Inc. of Montreal for Twinpak's multiwall paper and plastic industrial bag assets.
Bonar had sales of C$239.7 million (US$177.4 million) in 1994, up 19 percent from the previous year. Profit was C$13.1 million (US$9.7 million) vs. C$10.3 million (US$7.6 million). Plastics News estimated Bonar's film sales at US$77.8 million for the fiscal year ended Nov. 30, 1993, making it the 55th-largest film and sheet extruder in North America that year.
Low & Bonar was unsuccessful in 1988 when it last tried to buy out Bonar's minority shareholders. Tattersall said if most shareholders accept the current bid following due diligence, he will be ``tempted'' to go along with the deal, which must be accepted by parties holding 90 percent of minority shares.
Low & Bonar had 1994 sales of 420.9 million (US$671.3 million). Films and industrial packaging accounted for 36 percent of sales, followed by cartons, flexibles and other consumer packaging at 27 percent, industrial molding and dental plastics (15 percent), floor coverings (15 percent) and polypropylene yarns and fibers (7 percent).