Private equity group Apollo seals £3.3bn deal for packaging giant RPC

Private equity firm Apollo Global Management has agreed to buy packaging manufacturing giant RPC Group for £3.3bn.

Each RPC shareholder will receive 782p cash for every share they own, 7.6 per cent up on the company’s closing price of 734p on Tuesday.

The deal comes hours after Apollo pulled out of buying Arconic, the firm which made the flammable cladding on the outside of Grenfell Tower when it went up in flames in 2017, killing 71 people. The private equity firm pulled out because of a dispute over hundreds of millions of dollars worth of pensions liabilities it would have to take on in the acquisition.

Jamie Pike, RPC chairman, said: “The Board believes that the offer recognises the quality of RPC's businesses and the strength of their future prospects.

“The Board believes that the offer of £7.82 per share is a good outcome for shareholders and intends to recommend unanimously that they accept this offer.”

Nicholas Hyett, analyst at Hargreaves Lansdown, said: “It’s taken months to get to this stage, and the final offer price is some way behind what analysts had suggested was possible.

“It’s not impossible for a rival bidder to emerge, but plastic packaging is far from popular at the moment and with the global economy looking rocky, it might be asking a bit much to expect a rival to fork out the best part of £4bn to keep RPC out of private equity hands.

“It’s potentially disappointing for investors – a 15.6% premium is hardly over generous and the shares have traded higher in the last 12 months. But with board backing and minimal regulatory concerns, we’d expect the deal to go through.”

Near the end of last year RPC said its profits had dipped slightly, as adjusted profit before tax fell two per cent to £188.9m in the six months to September 2018.

Revenue for the six months was £1.892bn, a seven per cent increase on the same period last year.