Etex Group SA has snatched Marley plc from the hands of a hostile takeover, bidding £365 million ($606 million) for the British building materials company.
Marley of Sevenoaks, England, recommended that its shareholders accept Etex's cash offer rather than a hostile bid from small timber firm John Mansfield Group plc, which accused Marley directors of ``indiscriminate expansion'' of its plastics division.
Brussels, Belgium-based Etex makes roofing, flooring, and plastics building products along with plasterboard in Western Europe and Latin America. It reported 1997 pretax profit of 3.7 billion Belgian francs ($103 million) on sales of BFr 74.8 billion ($2.08 billion).
Marley has operations covering vinyl flooring, concrete and brick products, plastic pipes, fittings and hosing, decorative moldings, ventilation systems, window profiles and plastic garden furniture on four continents.
In the United States, Marley's plastics operations include Marley Mouldings Inc. of Marion, Va., Marley Floors (USA) Inc., including its 1997 acquisition, commercial PVC and rubber flooring producer Flexco Inc. of Tuscumbia, Ala., and garden furniture maker Syroco Inc. of Peabody, Mass.
Marley also has pipe extrusion and injection molding units in Britain, Germany, Austria, Hungary, Poland and the Czech Republic, as well as some automotive component molding in Germany. There are also plastics molding operations in South Africa, Australia and New Zealand, and flooring interests in Brazil.
Mansfield of Marchington, England, said it is ``considering its options'' in the face of Etex's offer. Mansfield's chief executive officer is David Jones, formerly chief executive officer of Rexam Octagon, the division formed by British packaging group Rexam plc to dispose of noncore units.
Etex Chief Executive Officer Canio Corbo said, ``The combination of Marley and Etex will create a group with powerful positions in a number of markets — notably roofing, plastic building products, cement board, plasterboard and flooring. We look forward to working with Marley.''
Marley reported pretax profit was up 12 percent to £48.4 million ($80 million) for the fiscal year ended March 31 on sales of £682.2 million ($1.13 billion).
Marley said it had been in discussions with Etex for a month before an agreement was reached — which came days after Mansfield launched what was seen as a hostile bid to unseat the Marley management.
Mansfield had valued Marley at £272 million ($451 million). The company had claimed that Marley management ``extended its diverse plastics portfolio without a rational strategy.''
``Marley's management has not been able to deliver any meaningful synergy benefits from its combination of, for example, U.K. drainage products with U.S. garden furniture or from German [do-it-yourself] products with U.K. and U.S. plastic flooring,'' Mansfield said when it announced its bid.
Mansfield wants to sell Marley's nonflooring plastics businesses and concrete and clay division.
In an unrelated move, Marley announced that it has sold Improdex Pty. Ltd., its plastics compounding business in Australia, to Melbourne-based Australian Vinyls Corp. Ltd. for A$9.6 million (US$6 million) cash.
In Australia, Marley's main plastics business is concentrated in extrusion and injection molding of plumbing and drainage pipe fittings, and domestic and mine ventilation hoses.
Marley acquired Melbourne-based Improdex, along with other vinyl units in Australia and New Zealand, from Pacific Dunlop Ltd. in 1995.
The greater part of Improdex's sales are to third parties and amount to A$17.9 million ($13.3 million), while only about A$5 million ($3.7 million) represents production used by Marley, according to a Marley spokesman in England.
The compounder supplies a range of markets including building products, automotive, footwear, bottle, wiring cable and tubing.
Australian Vinyls will continue to supply Marley.