After repeated attempts to stave off a takeover, the board of directors at polyurethane foam technology group British Vita (GB-Manchester M24 2DB; www.britishvita.com) unanimously voted to recommend that its shareholders accept a final cash offer from US private equity group Texas Pacific Group (Fort Worth, Texas) valuing the company at GBP 668m (about EUR 969m). At 360p per share, it is a premium of 40% on Vita´s share price of 11 January, when the first TPG bid was made. The agreed offer, which also is subject to regulatory approval, excludes the foam processor´s already declared dividend of 6.25p/share and values the company at 19.1 times its 2004 earnings.

In a reverse of his reaction to the first TPG bids, British Vita chairman David Cotterill said the new TPG offer, made just before a limit imposed by the London stock exchange, “delivers fair value to shareholders today for the business and its prospects.” Stephen Peel, London-based partner of TPG, said the US company “very much looks forward to working with British Vita management and employees.”

In the plastics sector, Texas Pacific – with worldwide assets of more than USD 15 bn – already owns TPE manufacturer Kraton Polymers (www.kraton.com). It made its bid for British Vita through a specially created company, TPG Spring (UK) Limited.

In its final business year as an independent company, British Vita reported a pretax profit of GBP 74.5m in 2004 on sales of GBP 959m, 2% head of 2003. Headline profit was down 3% to GBP 49m, reflecting increased raw material cost and a doubling of investment in rationalisation. Before the agreement with TPG, Vita said it planned to accelerate rationalisation in 2005 by reducing its presence in developed markets and shedding peripheral businesses, while at the same time pursuing investment opportunities in eastern Europe and China. The company plans to open new foam facilities in Hungary and Slovakia this year.

• Plasteurope.com Service: British Vita annual report & accounts 2004: PIE-No. 46918.