By Esha Vaish
(Reuters) - Packaging maker RPC Group Plc (L:RPC) said it would buy British Polythene Industries Plc (L:BRPI) (BPI) for about 261 million pounds in a cash-and-stock deal, as it looks to gain a hold in the European polythene films market.
The offer of 940 pence per share, based on the average closing price of RPC's stock over a month, represents a premium of about 30 percent to BPI's closing price as of June 8, RPC said in a statement.
Shares in BPI were up 32 percent at 954.5 pence at 0735 GMT, in line with the premium offered if calculated over RPC's close as of Wednesday. BPI stock was the top percentage gainer on the London Stock Exchange on Thursday.
RPC has been on the prowl for deals in eastern and western Europe over the past few years as the plastic packaging maker leads a consolidation in the industry that competes with glass, plastic and aluminium-based packaging products.
Asked whether RPC would pursue more deals, Chief Executive Pim Vervaat said, "Yes, we have an active pipeline of acquisition activities."
The company, however, would be very picky about what it bought, Vervaat told Reuters, adding that over the past five years RPC had looked at about 250 acquisitions, but closed on only 12.
RPC, which supplies packaging for Beiersdorf's (DE:BEIG) Nivea skin creams and Nescafe (VX:NESN) coffee capsules, said on Thursday each BPI shareholder would get for each share held 470 pence in cash and 0.60141 new RPC ordinary share.
The deal, which is expected to close by mid-August, will add to RPC's earnings per share within the first financial year and be "materially accretive" within the second, it said.
The enlarged company is also expected to achieve ongoing pre-tax cost synergies of 10 million pounds each year.
Vervaat said BPI had been on the company's radar for a while and the deal would help RPC strengthen its polymer buying capabilities.
RPC plans to raise about 90 million pounds through a placement of new ordinary shares to part-fund the deal.
RPC shares were up about 2 percent at 830 pence.