The glass maker Pilkington is set to become the latest UK company to fall under foreign ownership after it emerged that Nippon Glass of Japan is ready to offer £2.2bn in cash for the business.
Nippon, which already owns 20 per cent of Pilkington, has been rebuffed by its board twice but is now preparing to return with a third offer, worth about 165p. At that price, the Pilkington board, led by its chairman, Sir Nigel Rudd, is expected to back the offer, although a formal deal is still thought to be some weeks away.
The Japanese glass maker, which is only half the size of Pilkington, first made an approach at 150p a share last November. This was rejected, as was an improved offer pitched at 158p. At the time, it was thought that Nippon might walk away but it has decided to persevere.
Nippon's ability to fund the deal is unclear, although it is said to have the backing of the giant Japanese trading and financial conglomerate Sumitomo. At 165p a share, it would cost Nippon £1.7bn to acquire the 80 per cent of Pilkington it does not own. It would also have to take on £570m of debt, but there is no deficit to worry about in Pilkington's main UK pension scheme.
Pilkington and Nippon have a technical agreement to offer the same glass to the Japanese car industry and they also jointly own a small glass plant in the US.
A merger of the two would create a glass business on a similar scale to the world leader, Asahi of Japan. Pilkington shares closed almost unchanged at 156.75p.Reuse content