Silgan could lose out in bid to buy company

Can maker Silgan could lose out in its bid to buy Graham Packaging after an unnamed company bettered its offer.

Yesterday (13 June), Graham informed Silgan that it had “received an unsolicited proposal from a private non-investment grade company to acquire all of the shares of Graham Packaging for $25 per share in cash”.

Silgan had a US$1.4 billion bid to buy Graham Packaging accepted in April.

Graham has announced that its board of directors, upon the recommendation of its special committee, has concluded that this proposal could reasonably be expected to lead to a proposal that is superior to the pending transaction with Silgan.

The proposal is subject to due diligence, amongst other things, and there can be no assurance that the proposal will result in a definitive agreement providing for a transaction that is superior to the pending transaction with Silgan. Graham Packaging’s board of directors has not changed its recommendation with respect to the pending transaction with Silgan.

If Graham Packaging’s board of directors decide that the new proposal is a better offer, then the company is required to provide Silgan with three business days’ written notice prior to Graham’s board of directors changing its recommendation with respect to the pending transaction with Silgan.

During this period, Silgan would have a right to match the offer. Alternatively, if Graham Packaging does change its recommendation or accepts such proposal from the third party, Graham Packaging would be required to pay to Silgan a termination fee of $39.5 million.

Silgan is a leading supplier of metal containers in North America and Europe, and a leading worldwide supplier of metal, composite and plastic vacuum closures for food and beverage products. In addition, Silgan is a leading supplier of plastic containers for personal care products in North America.

Graham Packaging is a leading US supplier of plastic containers for hot-fill juice and juice drinks, sports drinks, drinkable yoghurt and smoothies, nutritional supplements, wide-mouth food, dressings, condiments and beers.