British Vita rejects £667m Texas offer

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The Independent Online

British Vita, the foam rubber to nappies group, yesterday rejected a new higher offer from the US private equity group Texas Pacific Group that valued the Manchester-based company at about £667m.

British Vita, the foam rubber to nappies group, yesterday rejected a new higher offer from the US private equity group Texas Pacific Group that valued the Manchester-based company at about £667m.

British Vita said the indicative offer, at 353p a share, undervalued the chemical company. It refused to grant Texas Pacific access to its books, which the buy-out group said it would need before making a formal offer.

Following a board meeting of directors to discuss the latest offer, David Cotterill, the Chairman of British Vita, said: "The board believes that Texas Pacific Group's latest proposal continues to undervalue British Vita and its prospects. We also believe that it is now high time for TPG to clarify its final position and thus enable the board to provide shareholders with its final advice on this situation."

Texas Pacific has been stalking British Vita for some time. The San Francisco-based firm initially proposed a 325p a share cash offer before raising the stakes to 335p in early February.

The group would not comment on whether it would make a higher bid. Analysts believe it is willing to pay more than it has put on the table, but do not think it would match the 400p a share price some brokers have named as a fair price for British Vita.

While Texas Pacific said its latest bid was worth 353p to shareholders, British Vita said its value was only 346.75p, because the higher price includes a 6.25p final dividend British Vita said on Monday it would pay investors on 18 March.

British Vita also said on Monday it would try to fend off Texas Pacific's offer by returning £185m to shareholders through a special dividend of 100p a share. Those plans will be scrapped if the private equity offer succeeded.

The Takeover Panel has given Texas Pacific Group until 21 March to make a firm offer or walk away.

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