Shares in packaging giant RPC Group PLC (LON:RPC) zipped higher on Thursday after US rival Berry Global told the market that it was looking at outbidding Apollo Management.
Indiana-based Berry confirmed it has requested information from RPC which would allow it to carry out the necessary due diligence ahead of a “possible offer in cash”.
READ: RPC set to be taken over by Apollo for £3.3bn
RPC acknowledged the request in a stock exchange announcement on Thursday afternoon and said it will "engage with Berry ... in order to advance discussions in the interests of delivering best value to shareholders".
A £3.3bn bid from private equity firm Apollo was recommended by RPC’s board last week following months of discussions between the two parties.
But two major shareholders – Aviva and Royal London Asset Management – have publicly criticised that 782p-a-share offer as being too low.
Berry said there was no certainty it would end up lodging a bid and a further announcement will be made in due course.
Lowball offer
“The current offer from Apollo is lower than we had expected, and probably disappointed many investors,” said Hargreaves Lansdown analyst Nicholas Hyett.
“A lowball offer has left the door open to a rival bidder, and an industry buyer like Berry would be best placed to make a higher number stack up.
“There’s potential for operating synergies, always a key consideration in packaging M&A, and a listed player could potentially pay in a mixture of equity and cash as well – although Berry have said they are interested in making a cash offer.”
RPC shares climbed 3.7% on Thursday to 794p, which is ahead of Apollo’s offer price, suggesting investors are anticipating a bidding war.
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