The long and bruising takeover battle between Macfarlane plc and British Polythene Industries plc is over, with BPI staving off its rival's hostile advances.
Glasgow, Scotland-based Macfarlane, which had bid 114 million ($169 million) for its larger rival, finally conceded defeat Dec. 16. That was when its final offer lapsed, leaving it with acceptance from investors holding just 35.1 percent of BPI shares.
Cameron McLatchie, BPI chairman and chief executive officer, had convinced the company's two biggest institutional shareholders, London-based UBS Asset Management and 3i Group plc, to vote against the deal.
BPI now has committed to spending 35.4 million ($52 million) to buy back 30 percent of its shares at 3.20 ($4.70) per share. Macfarlane plans to participate in the buyback, according to CEO Iain Duffin, although the company will remain a major BPI shareholder.
BPI's tender offer was 10 pence (15 cents) per share higher than Macfarlane's bid.
Meanwhile, Greenock, Scotland-based BPI — Europe's top polyethylene film producer — has announced more plant shutdowns as part of its restructuring plan.
Operations to close in the company's packaging services division include PC Polythene of Workington, England, with a loss of 50 jobs. Another 25 jobs will go with the shutdown of three distribution depots in Newcastle upon Tyne, Birmingham and Nottingham, all in England.
"These closures will result in a total cost reduction of 1.55 million [$2.3 million], and together with savings announced earlier will bring the total cost savings announced to 9.45 million [$14 million]" per year, McLatchie said.
McLatchie said BPI fought the takeover effort because it undervalued the company.
"The board has always been and continues to be prepared to enter into discussion with any party who proposes making an offer for the group at a level which, in the board's view, would enhance shareholder value," he said.
A packaging analyst at ABN Amro in London said BPI now has trimmed most of its dead wood through its restructuring plan, although there may be a few more disposals to come.