Swedish packaging group PLM AB has succumbed to the advances of its suitor Rexam plc and recommended its shareholders accept the British group's £380 million pound ($639.8 million ) takeover offer.
The board of PLM of Malmo, which initially gave the offer the cold shoulder, has supported it after considering alternative industrial and financial partners. It based its acceptance on ``current industry prospects and the fairness'' of the bid, PLM said in a statement.
PLM's largest investor, Industrivarden AB, had sold its 23 percent stake to Rexam on Dec. 7.
Meanwhile, Rexam said it is close to selling its industrial packaging division. Analysts say front-runner hopefuls now include Swedish paper and packaging group SCA and several venture capital groups.
PLM, which reported 1997 annual sales of 60 million Swedish kronor ($7.85 million), is a leading European manufacturer of beverage cans, glass containers and refillable and one-way PET bottles.
It operates four plastic container plants in Scandinavia and the Czech Republic. At Lidkoping, Sweden, PLM blow molds PET bottles, while in Denmark it has two plants: at Langeskov, where it injection molds bottle preforms and blows polyethylene and other plastic medical containers, and at Kolding, acquired last year, which molds food containers.
Last year, too, PLM added a PET bottle blowing plant with two lines at As in the Czech Republic aimed at serving the German mineral water market. Most of the blow molding machines at the plants are Sidel and Krupp Kautex models, according to PLM's head of communications, Per Erlandsson.
He said PLM decided to sell the company after reviewing its overall industry position. In plastics packaging, this included the slow rate of substitution of glass bottles by PET for mineral water in Germany. This means PLM's new Czech PET plant is only operating at half its capacity, Erlandsson said.
Meanwhile, PLM faces difficulties in Eastern Europe, where it recently set up a can manufacturing plant in Russia.
Rexam Chief Executive Rolf Borjesson formerly was PLM's CEO.