The board of plumbing and heating supplier BSS Group has agreed to a 拢533 million takeover by builders merchant Travis Perkins.
The deal would see Travis Perkins, which already owns City Plumbing, Wickes and Keyline, move ahead of Wolseley and the UK鈥檚 largest plumbing and heating retail business.
City analysts have commented in the press that although a counter bid for BSS could emerge, perhaps from Saint-Gobain of France, the merger of TRavis Perkins and BSS made a lot of sense.
The board of Travis Perkins said that it 鈥渉as, for some time, believed that further consolidation in the UK building materials merchanting sector offers significant scale benefits in terms of cost savings and improved operational efficiency to those that proactively participate. In addition, Travis Perkins believes that the recession has accelerated the long-term trend of customers' increasing use of different distribution channels to source building materials. Against this backdrop, Travis Perkins believes there is a powerful strategic logic which underpins a combination of Travis Perkins' plumbing and heating activities through its existing distribution and retailing businesses with BSS.鈥�
The Indicative Offer comprises 232.91 pence in cash, 0.2608 new Travis Perkins shares per BSS share and the BSS Dividend of 6.09 pence per share. The Indicative Offer values BSS at a price of 433 pence per BSS share (based on the closing share price of 745 pence per Travis Perkins share on 27 May 2010, the last trading day prior to the date of this announcement) and values the entire issued and to be issued share capital of BSS at approximately 拢553 million.
The boards of BSS and Travis Perkins have consulted with certain of BSS's largest institutional shareholders who have indicated their support for the Indicative Offer at this level and with this mix of consideration.
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