Travis Perkins has announced today that it has put in an indicative offer of £553 million for the entire issued and to be issued share capital of the BSS Group.
The offer values BSS at a price of 433 pence per BSS share, based on the closing share price of 745 pence per Travis Perkins share on May 27, the last trading day prior to the announcement. The offer also includes a 232.91p per share cash element and 0.2608 new Travis Perkins shares per BSS share. The cash component of the offer, about £297 million, will be funded by existing Travis Perkins resources.
In a statement issued today, the BSS group said: “Given the current volatility in the equity markets, the support of certain shareholders for the Indicative Offer and the significant scale benefits from a combination, the board of BSS would currently be prepared to recommend an offer by Travis Perkins to acquire the entire issued and to be issued share capital of BSS if made on the same terms as the Indicative Offer.”
As part of its joint statement with BSS, Travis Perkins said that they believed BSS could be successfully integrated into the company’s current portfolio, and that consolidation of the building materials sector creates benefits such as cost savings and improved operational efficiency. The group also added that the enlarged group would be able to source products more competitively and give the groups access to lower-priced properties from which to trade.
If the offer is accepted by BSS shareholders, the deal would create Britain’s largest plumbing and heating distribution business, with combined revenues of roughly £4.3 billion and a total workforce of 19,000.