Cash offer of 720 pence for each BPB share

• The board of Saint-Gobain announces the terms of a cash offer for the entire issued and to be issued ordinary share capital of BPB. The Offer will be made outside the United States by BNP Paribas and UBS on behalf of the Offeror, a wholly owned subsidiary of Saint-Gobain, and inside the United States by the Offeror.

• The Offer of 720 pence in cash for each BPB Share, valuing the entire issued and to be issued ordinary share capital of BPB at approximately £3,677 million, provides BPB Shareholders with an opportunity to realise value in cash at a very significant premium.

• The Offer represents a premium of approximately

– 40.5 per cent. to the closing price of 512.5 pence for each BPB Share on 20 July 2005, the last trading day prior to commencement of the Offer Period; and

– 43.3 per cent. to the average closing price of 502.5 pence for each BPB Share for the three months prior to and including 20 July 2005, the last trading day prior to commencement of the Offer Period.

• The Offer represents a multiple of

– 18.9 times earnings per share before exceptional items and goodwill amortisation; and

– 9.8 times EBITDA for the year ended 31 March 2005.

• The multiples compare favourably with other transactions in the sector.

• The acquisition of BPB sits at the core of Saint-Gobain's strategy. The board of Saint-Gobain strongly believes an acquisition of BPB by Saint-Gobain will provide significant benefits:

– there is an excellent business case for a combination of Saint-Gobain’s and BPB’s businesses, from both a product and geographic perspective. In particular, the Enlarged Group will have a broader global footprint from which to offer customers a wider range of products and solutions;

– the Enlarged Group will be present in all key global building materials markets with product offerings across a broad range of high growth product segments, particularly insulation and plasterboard, and will offer attractive development opportunities. BPB's strong presence in the North American plasterboard market complements Saint-Gobain's wall siding, roofing and insulation products portfolio in that region. In Europe, the Enlarged Group will benefit from further scale in building materials manufacturing and be able to develop its presence in Central and Eastern Europe. The respective footholds of BPB and Saint-Gobain in Asia will provide the Enlarged Group with a platform for further expansion in high growth, emerging markets;

– the combined industrial, commercial, technical and marketing excellences, directed at the same client base (contractors, distributors and installers) in the newbuild and renovation markets, will improve the Enlarged Group’s ability to fully benefit from market growth opportunities;

– as part of the Enlarged Group, BPB will benefit from the financial strength and geographic spread of a large international group;

– the partnership between Saint-Gobain and BPB will enable the Enlarged Group to enhance top-line growth and generate cost synergies through a combined product offering and the sharing of commercial, operational and logistics best practices.


Commenting on the Offer, Saint-Gobain said:

“We are very disappointed that the Board of BPB has taken the attitude it has taken. We have tried three times to engage BPB in meaningful negotiation and have failed to do so. In both the press announcement of Friday 22 July and the announcement that was put out this morning by BPB, our approach was described as “unwelcome”, but we very much doubt it is unwelcome to BPB Shareholders. In the face of this inability to reach a private agreement, Saint-Gobain now has no option other than to put its proposal to BPB Shareholders.

As the offer of Saint-Gobain is in cash, the issue for BPB Shareholders is the fair value of BPB. Saint-Gobain has considered this issue very carefully and believes that, based on the information available to it including that released today, 720 pence per share fully and fairly values the company. It is now up to the Board and management of BPB to put substance to its statement that Saint-Gobain's proposal substantially undervalues BPB. We look forward to the justification of this statement. It is a matter of real regret that we have to conduct this price discussion in public.”


This summary should be read in conjunction with, and is subject to, the full text of the attached announcement. The Offer will be subject to the conditions set out in Appendix I and to the full terms and conditions set out in the Offer Document and Form of Acceptance.

Terms used in this summary shall have the meaning given to them in Appendix II. The Offer Document and the Form of Acceptance will be posted to BPB Shareholders (other than to persons with addresses in Restricted Jurisdictions), as soon as practicable and, in any event, within 28 days of this announcement unless otherwise agreed with the Panel.

This announcement does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to subscribe for or buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by the Offer Document and the Form of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

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.

Copies of this announcement and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from a Restricted Jurisdiction. The Offer (unless otherwise determined by the Offeror and permitted by applicable law and regulation), will not be made, directly or indirectly, in or into, a Restricted Jurisdiction and the Offer will not be capable of acceptance from or within any Restricted Jurisdiction.

The ability of BPB Shareholders who are not resident in and citizens of the United Kingdom to accept the Offer may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be contained 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.

In accordance with normal UK market practice and pursuant to an exemptive order from the SEC, the Offeror, Saint-Gobain or their nominees or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, BPB Shares outside the United States, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK and communicated in the US by way of an announcement by or on behalf of the Offeror.

This announcement, including information included or incorporated by reference in this announcement, contains "forward-looking statements" concerning Saint-Gobain and BPB. Information in this announcement relating to BPB has been compiled from published sources. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates" or similar expressions identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' ability to control or estimate precisely, such as future market conditions and the behaviour of other market participants. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this document and, except as otherwise required by law, Saint-Gobain does not undertake to update any of the forward-looking statements set out herein.