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Travis Perkins agrees terms of BSS takeover

Builders merchants group Travis Perkins has announced details of its proposal to take over plumbing and heating merchant the BSS Group plc.

Travis Perkins agrees terms of BSS takeover

The deal is still subject to approval by shareholders of both groups as well as the Court and Office of pair Trading, however, it is expected to go ahead in the fourth quarter of this year.

The recommended cash and shares acquisition values each BSS Share at 435.8p and consideration for each BSS Share is 232.91p in cash, 0.2608 New Travis Perkins Shares (valued at 196.8p) and payment of the BSS Final Dividend for the year ended 31 March 2010 of 6.09p.

Travis Perkins has received irrevocable agreements and letters of intent agreeing to the purchase, accounting for approximately 35% of BSS shares. The offer values BSS’s issued and to be issued share capital at around £557.6m, an uplift of around 37% on the share price on May 27, the day before the announcement of Travis Perkins’ intention to bid.

Travis Perkins believes there is a “powerful strategic logic” to the acquisition. It is expected to deliver annual pre-tax cost savings of at least £25m in 2013, materially enhanced earnings in 2011 and additional growth potential from cross-selling and revenue synergies.

Travis Perkins chairman Robert Walker said: “We believe that there is a strong strategic rationale for the acquisition of BSS which will create the leading plumbing and heating trade and retail distribution business in the UK. Our respective businesses are complementary and we are confident that this transaction can deliver significant value for the shareholders.”

Peter Warry, Chairman of BSS said: “The management team and employees have succeeded in building BSS into a leading specialist distributor to trade customers and a market leader in the UK plumbing and heating sector, creating significant value for shareholders.

“The BSS Board believes that Travis Perkins’ offer recognises this value and gives our shareholders the opportunity to share in the future success of the Enlarged Group.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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