The world is not enough.
Travis Perkins offers £553m for BSS
Published: 28 May, 2010
NORTHAMPTON: Travis Perkins has made a £553m indicative offer for BSS Group. Both companies said in a statement issued this morning that they were in advanced discussions regarding a cash and shares offer from Travis Perkins that values each BSS share at 433p.
Travis Perkins said its indicative offer comprises 232.91p in cash, 0.2608 new Travis Perkins shares a BSS share and the payment of BSS's final dividend for the year to March 31 of 6.09p a share.
BSS said today that although it remains confident in the standalone prospects for the company, "given the current volatility in the equity markets, the support of certain shareholders for the Indicative Offer and the significant scale benefits from a combination", it would currently be prepared to recommend an offer by Travis.
Travis, worth over £1.5bn, believes further consolidation in the UK building materials merchanting sector offers "significant scale benefits in terms of cost savings and improved operational efficiency".
It also thinks 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," it said in a statement.
"The combination would create the leading plumbing and heating trade and retail distribution business in the UK."