Compagnie de Saint-Gobain
05 October 2005
Not for release, publication or distribution, in whole or in part, in, into or
from Australia, Canada or Japan
5 October 2005
Compagnie de Saint-Gobain ('Saint-Gobain')
Cash Offer for BPB plc ('BPB')
Response to BPB's statement on additional capital return
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.'
Enquiries
Saint-Gobain (for analysts and investors)
Florence Triou-Teixeira, Head of IR Tel: +33 1 47 62 45 19
Alexandre Etuy, Deputy Head of IR Tel: +33 1 47 62 37 15
BNP Paribas (joint financial adviser to Saint-Gobain)
Thierry Dormeuil Tel: +33 1 42 98 12 34
Oliver Ellingham Tel: +44 20 7595 2000
UBS Investment Bank (joint financial adviser and broker to Saint-Gobain)
Charles-Henri Le Bret Tel: +33 1 48 88 30 30
Liam Beere Tel: +44 20 7567 8000
Brunswick (PR adviser to Saint-Gobain)
John Sunnucks Tel: +44 20 7404 5959
Sophie Fitton Tel: +44 20 7404 5959
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.
This information is provided by RNS
The company news service from the London Stock Exchange
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.