LONDON — Caraustar Industries Inc. has dropped its plans to buy Britton Group plc, although neither firm is ruling out a future deal.
Atlanta-based Caraustar had announced Oct. 9 it was considering a cash offer of £1.20 ($1.95) per share for the London-based folding carton and plastics film manufacturer. The deal would have been worth $270 million.
Britton, however, rebuffed the offer as ``absurdly low'' and dubbed the move ``purely optimistic.''
Caraustar officials said they were surprised by the rejection, in view of Britton's poor profit performance and share price this year. But in a news release, Caraustar announced that it would not bid to buy Britton at this time.
Still, Britton management seemed to keep the door open to a more favorable offer. Robin Williams, Britton's chief executive officer, said sensible offers will not be ruled out.
Britton's six-month results, through June 30, showed sales of $176 million, essentially flat from $177 million for the same period a year ago. Profit, meanwhile, dipped 30 percent to $12.8 million.
Britton blamed reduced margins for plastics exports on the strong pound and a delay in carton sales growth in the United States.
Caraustar is most interested in Britton's Universal Packaging Corp. subsidiary of Bow, N.H., which has six U.S. paperboard carton plants, and some plastic operations.
London's Financial Times quoted analysts as predicting that if a deal does finally go ahead, Caraustar would sell off Britton's U.K. plastics division. It has 10 plants covering polyethylene and polypropylene film, conversion, printing and security products, such as cash bags.