BPB rejects £3.6bn takeover bid from Saint-Gobain

Materials supplier BPB has rejected a £3.6bn takeover proposal from French firm Saint-Gobain, weeks after refusing a similar takeover.

Saint-Gobain, Europe's biggest distributor of building materials, approached BPB with a 720p-a-share cash offer, the UK-based company said in a statement today. BPB spurned the bid and said it would speed up plans to return £350m to investors and to increase its annual dividend payment.

Saint-Gobain wants to add Slough-based BPB's plasterboard business to its own insulation unit to create the world's biggest supplier of building interiors. Chairman Jean- Louis Beffa increased his offer after BPB Chairman Ian Gibson rejected an initial approach of 675p-a-share on 22 July.

The 720p proposal is 41% higher than BPB's price on July 20, the day before Saint-Gobain said it was considering a bid.

In a statement, BPB said: “The board strongly believes that this unwelcome proposal continues to substantially undervalue the unique position of BPB, its underlying strategic value and attractive growth prospects. Therefore, were an offer to be made at this level, the board would have no hesitation in advising shareholders to reject it.

“BPB has been experiencing favourable trading conditions for some time and the board has been actively considering means of returning capital to BPB shareholders. To facilitate a special return of capital it would be necessary to undertake a capital reorganisation and measures have been underway for several months to achieve this objective.

“The board believes that it would be appropriate to bring forward the announcement of its plans to return capital to shareholders and its intention to increase significantly its annual dividend, while maintaining its strategy for growth and future capital investment.

“BPB intends to effect a capital return of just over £350m as soon as practicable following the end of the offer period. Subject to any necessary shareholder approval and the other requirements set out in the Appendix, BPB shareholders on the register as at the relevant record date will be entitled to receive a capital return of 70p per share.”