(Adds background, updates share movement)
Feb 9 British packaging company RPC Group Plc
said on Thursday it would acquire Letica Group, a
U.S.-based maker of plastic food-packaging products, for up to
$640 million to expand outside Europe.
RPC shares fell as much as 5.9 percent to 997 pence by 1045
GMT on the London Stock Exchange, after earlier rising as much
as 3 percent.
The deal comes at a time when the European plastic packaging
industry is undergoing a consolidation to better compete with
glass, plastic and aluminium-based packaging products.
RPC has signed six deals since September for a net
consideration of about 850 million pounds ($1.07 billion),
including the Letica deal, and reported in November a 53 percent
rise in its first-half revenue, helped by the acquisitions.
RPC said it expected to record pretax cost savings of about
$5 million within the second full year of ownership, and that
Letica management had identified synergies worth about $12
UBS, Jefferies and Panmure Gordon analysts reiterated their
"buy" rating, while Numis reaffirmed its "add" rating.
RPC will pay $490 million upfront, and an additional
consideration of up to $150 million will be payable after Letica
meets certain core earnings targets over a two-year period, it
said in a statement.
RPC also said it would raise gross proceeds of about 552
million pounds through a 1-for-4 rights issue to finance the
($1 = 0.7961 pounds)
(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by
Gopakumar Warrier and Amrutha Gayathri)