Cash offer for BPB PLC (“BPB”) response to BPB's statement on additional capital return
October 5, 2005
Not for release, publication or distribution, in whole
or in part, in, into or from Australia, Canada or Japan.
Saint-Gobain notes today's announcement from BPB that it
is increasing its proposed return of capital from £350
million to £600 million and that it intends to grow
dividends by 88% over the next three years. Saint-Gobain questions
whether this is in the best interests of shareholders.
BPB has been keen to stress its desire to create shareholder
value through long-term growth. However, its initial response
to Saint-Gobain's proposed offer was to incur heavy borrowing
to fund a very large share buyback and to offer significantly
increased dividends on the remaining outstanding shares. Today,
it has decided to mortgage further the future of the company
thereby jeopardising not only future growth prospects, but
possibly its fundamental stability.
Saint-Gobain continues to believe that this offer would be
better discussed in a private forum. Unfortunately, BPB does
not want to do so. In light of this, Saint-Gobain believes
there are a number of questions shareholders should be asking
BPB:
| - If BPB implements this proposed buyback, what will the gearing level be over the next 5 years? |
|
| - Is BPB's dividend level sustainable? What will the future level of dividend cover be? |
|
| - Are BPB shareholders being asked to choose between growth or cash? |
|
| - Is the sale of some of BPB's businesses the first sign that its growth plan will be difficult to finance given this new cash back strategy? |
|
| - Isn't the whole cash back strategy increasing risk substantially for shareholders? |
Jean-Louis Beffa, Chairman and CEO of Saint-Gobain said:
"Saint-Gobain believes that substantially increasing
dividends and borrowing heavily to fund buy backs does not
affect the fundamental value of the BPB business. Our cash
offer of 720p per share offers certainty and value for BPB
shareholders today."
Notes
Copies of the Offer Document and the Form of Acceptance are
available for collection (during normal business hours) from Capita
Registrars at PO Box 166, The Registry, 34 Beckenham Road, Beckenham,
Kent BR3 4TH.
Further information on Saint-Gobain is available on Saint-Gobain’s
website www.saint-gobain.com.
Terms used in this announcement shall have the meaning given to
them in the Offer Document.
The Offer in the United States is made solely by the Offeror and
neither BNP Paribas, UBS nor any of their respective affiliates
is making the Offer into the United States.
The Saint-Gobain Directors and the Offeror Directors accept responsibility
for the information contained in this announcement. To the best
of the knowledge and belief of the Saint-Gobain Directors and the
Offeror Directors (who have taken all reasonable care to ensure
that such is the case), the information contained in this announcement
for which they are responsible is in accordance with the facts and
does not omit anything likely to affect the import of such information.
BNP Paribas and UBS are acting exclusively for Saint-Gobain and
the Offeror in connection with the Offer and no one else, and will
not be responsible to anyone other than Saint-Gobain and the Offeror
for providing the protections afforded to respective clients of
BNP Paribas and UBS nor for providing advice in relation to the
Offer or any other matter referred to herein.
This announcement does not constitute an offer to sell or an invitation
to purchase any securities or the solicitation of an offer to buy
any securities.
