Elopak's owner, FERD, joined together with CVC Capital Partners, a UK-based investment group, to launchthe all-cash offer this week for the entire share capital of SIG Holding Ltd. The offer, made lastweek, valued SIG at about €1.3bn.
The offer was rejected by SIG's board earlier this week as being too low and"inadequate". The board said it would open the door to other takeover offers after layingout some ground rules. The FERD and CVC bid still remains on the books for shareholders to consider.
The joining of Elopak with SIG would have created the world's second largest carton supplier to the food and beverage industry,according to the two bidders. The consolidation of their activities would have created a powerfulsupplier in the market, leaving processors with less choice.
In making the offer FERD and CVC said the combination of SIG and Elopak follows a "compelling industrial logic".They argue that both businesses are highly complementary in terms of the products they sell andtheir geographical reach.
"In particular, the combined group will have a broader global footprint from which to offer customers a wider range of products andsolutions," they stated in making the bid. "The combined group will be present in all key global carton packaging markets with product offerings across the whole range of beverage and food carton packaging and will offer attractive opportunities for further expansion in high growth, emergingmarkets."
They also noted that by combining the research and development activities they could bring morenew products to the market at a faster pace.
"The partnership between SIG and Elopak will enable the combined group to enhance top-line growth and generate operational synergies through a combined product offering and the sharing of commercial, operational and logistics bestpractices," they stated.
Elopak supplies packaging systems for non-carbonated liquid food products. It has a global network of productioncentres, sales offices, subsidiaries and licensees about 40 countries. SIG supplies aseptic beverage cartons and packaging equipment for value added beverages and liquid food.
Johan Andresen, Jr., FERD's owner, said both companies had been trying to negotiate the transaction for a"considerable time". SIG had at one time made an offer to purchase Elopak from FERD, amove that was rejected by Andresen.
"We have repeatedly been seeking the support of the SIG board of directors for the proposed transaction and are now directing this proposal to SIG shareholders on the basis of our current knowledge of thecompany," he said.
He said if the takeover does go through FERD and CVC plan to transfer Elopak's business to SIG. FERDwill hold an interest of slightly more than 50 per cent in the combined company.