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Apollo Global, Bain in early talks to buy UK packager RPC
[BENGALURU] RPC Group has held preliminary takeover talks with alternative investment manager Apollo Global Management and private equity firm Bain Capital, it said on Monday, sending shares in Europe's biggest plastics packager up 25 per cent.
Apollo and Bain each have until Oct. 8 to make a firm offer for UK-based RPC or walk away, the company said, in response to a Bloomberg report on Saturday that said it was exploring strategic options including a sale.
RPC, whose shares were down 22 per cent year to date on Friday, has been under pressure from investors to raise more cash and cut capital spending.
Last month it announced it would raise US$95 million by selling its Letica food packaging business.
In July RPC said it would prioritise the proposed disposal of some assets as it looked to generate capital for expansion or to return money to shareholders.
The company had a market capitalisation of 2.78 billion pounds (S$4.96 billion) as of Friday. The gains on Monday, if held, would raise that to 3.45 billion pounds.
Several of the world's big packaging firms have been looking for acquisitions with Amcor Ltd agreeing last month to buy U.S. rival Bemis Company Inc for $5.25 billion.
The UK's DS Smith Plc offered 1.9 billion euros (S$3.02 billion) to buy Spanish rival Europac in June, while Ireland's Smurfit Kappa bought Dutch paper and recycling firm Reparenco for 460 million euros.
Brokerage Jefferies has said it expects further sector consolidation with both bolt-on and large acquisitions in Europe as online shopping drives demand for packaging.
Shares in RPC, which operates in 34 countries, were up 23 per cent at 840 pence in early trading, topping the UK mid-cap index.