BPB Plays Hard To Get

Glass and building manufacturer Saint-Gobain was surprised when BPB rejected its 675p offer. But how much is BPB really worth?

French glass and building materials maker Saint-Gobain resembled an England batsman: the group was surprised by the "speed of its dismissal", in this instance by plasterboard maker BPB, says Lex in the FT. Saint-Gobain had offered 675p per share for BPB which would have valued BPB at £3.37bn. BPB's reaction? Not interested: it would have "no hesitation" advising shareholders to reject the offer, it said in a statement.

So why is BPB so confident that's it's worth so much more than the French group has offered? The world's biggest plasterboard maker believes it has an excellent future as an independent company, and would continue to explore means of "enhancing returns" to its investors, said Matthieu Robbins on Reuters.co.uk. Its pre-tax profit has grown by some 90% over the past three financial years, and this should continue as BPB faces "very favourable trading conditions", the group said.

If the current bid does undervalue BPB, what takeover offer from Saint-Gobain would BPB seriously consider? Analysts reckon the group could show scope for 5 to 10% earnings upgrades, says Lex, which means the French outfit's offer should be nearer to 742p per share. Whether Saint-Gobain is willing to offer as much, though, remains to be seen.

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