Texas Pacific made a formal bid of 335p a share yesterday for the Manchester- based company, led by chief executive David Campbell, which on Wednesday night rejected an initial lower offer for its business from the San Francisco-based firm.
The private equity firm, which has $15bn of assets, owns stakes in Debenhams, Burger King and Oxford Health Plans. It took a stake in Punch Taverns, the vehicle created by Hugh Osmond in 1997 when he bought 1,500 pubs from Allied Domecq. Texas Pacific revealed it had been examining British Vita with its advisers, NM Rothschild, for months. "It is a company which is not really appreciated by the stock market," a spokesperson for Texas Pacific said.
The 335p offer is at a 20 per cent premium to the price British Vita closed at on Wednesday, when shares surged 15 per cent because the company made a Stock Exchange announcement saying it had rejected an initial bid. Its shares rose 5.25p to 71p yesterday. British Vita could attract a counter bid, possibly from ICI, which would put Texas Pacific under pressure to raise its offer further.
Founded in a former Lancashire cotton mill in 1949, British Vita operates in 21 countries. It is the largest maker of foam rubber in the UK and its products are used in applications ranging from nappies to military aircraft.
Last September, the group said it planned to pursue bolt-on acquisitions and develop its businesses in high-growth areas. In December, it announced the pounds 14.7m acquisition of Tyrfil, a US-based producer of polyurethane for tyres. However, in its last trading update in December, the group said rising raw materials costs had put pressure on profit margins. It would not comment on the offer.