Materials firm says both companies have agreed on strategy behind takeover, which will boost its heating and plumbing business
黑洞社区 materials firm Travis Perkins has announced it is in advanced talks about a 拢553m swoop for BSS Group.
In a statement to the City, the 拢3bn-turnover company said both sides agreed on the strategic logic behind a tie-up, which hinges on the cost savings and efficiencies that will arise.
Travis Perkins will also use the deal with the 拢1.4bn-turnover BSS to boost its heating and plumbing business.
The statement said: 鈥淭ravis Perkins believes that the recession has accelerated the long-term trend of customers鈥� increasing use of different distribution channels to source building materials. Against this backdrop, Travis Perkins believes there is a powerful strategic logic which underpins a combination of Travis Perkins鈥� plumbing and heating activities through its existing distribution and retailing businesses with BSS.鈥�
Travis Perkins shares rose 6% to 791p in early trading while BSS shares rose 34% to 436p.
Despite the rises not all were convinced it represented good value for BSS shareholders.
Cenkos analyst Kevin Cammack said: 鈥淚t makes a lot of sense for Travis Perkins but I鈥檓 not entirely sure why BSS is so keen to lose its independence at that price given it has seen a significant turn in trading fortunes over the past six months and has no need of help. I would have thought BSS could eke out a better price than this.鈥�
Meanwhile Liberum Capital analyst Charlie Campbell described the deal as 鈥渟urprising but positive鈥�. He said: 鈥淲e liked Travis shares before the deal and like them more now, not least because the company鈥檚 fortunes become less tied to the macro-economy and more dependent on management鈥檚 ability to deliver integration synergies, and we would back them to deliver.鈥�
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