Plastic packaging giant RPG has reportedly confirmed takeover talks with Apollo Global Management and private equity firm Bain Capital. Both Apollo and Bain have until Oct. 8 to offer a deal or walkway, stated RPC in response to previous reports of the company exploring strategic options including a sale.
As per trusted sources, RPC’s latest shares were recently down by 22 percent year to date. As a result, the firm’s been under constant pressure from investors to generate high returns and cut capital spending. The firm had even announced to raise $95 million from selling its Letica food packaging business.
RPC claimed it would prioritize to sell some assets as it seeks to generate capital for expansion or to return shareholders their money. As on Friday, the firm depicted a market capital of 2.78 billion pounds.
According to a news release published by Telegraph, speculations regarding a possible takeover of the firm arrived on the heels of a backlash against plastic and controversial rows among investors over the firm’s growth strategy.
In the recent years, RPC has experienced rapid growth post acquiring several of its rivals, including the acquisition of PLASgran, a rigid plastic recycling firm for £35m.
Incidentally, the talks of a possible sale comes amid other industry consolidations as well, like Amcor Ltd, agreeing to acquire U.S. competitor Bemis Co. for $5.25 billion and DS Smith Plc buying Spanish packaging supplier Europac for 1.9 billion euros.
For the record, RPG’s origin dates to 1991 through a takeover of five manufacturing sites in the UK from SCA. The firm has a presence in over 34 countries, as stated on its website and reported a full-year revenue of 3.75 billion pounds.
After RPG confirmed takeover talks, its shares have reported soared by 18% to 801 pence, claim sources familiar with the knowledge of the matter.