Silgan loses out in bid to buy company
Can maker Silgan has lost out in its bid to buy Graham Packaging after New Zealand’s Reynolds Group bettered its offer.
Earlier this month, 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, a leading manufacturer of food cans in the US and metal and plastics closures worldwide, had a US$1.4 billion bid to buy Graham Packaging accepted in April.
Graham announced that its board of directors, upon recommendation of its special committee, determined that the Reynolds Group proposal was superior to its pending transaction with Silgan Holdings.
Subsequently, Graham provided 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. Silgan had the right to make a responsive offer during this period but the parties failed to reach an agreement.
Graham must pay a termination fee of $39.5 million pursuant to the merger agreement.
Graham shareholders will receive $25.00 in cash for each share of Graham common stock, representing a total enterprise value, including net debt, of approximately $4.5 billion.
The deal is expected to be completed in the second half of 2011 and is subject to customary regulatory approvals and closing conditions, including the approval of Graham’s stockholders.
The Reynolds Group is a leading global manufacturer and supplier of consumer food and beverage packaging and storage products.
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.
