Nippon in Pilkington talks
Shares in St Helen’s-based glass producer Pilkington jumped 25 per cent after confirmation that it is in merger talks with Japanese company Nippon Sheet Glass.
Analysts questioned the strategy behind Nippon’s approach, but the stock market was convinced as Pilkington’s shares finished the day at 153.25p a share, up 26.50p.
Pilkington’s share price initially spiked on speculation that French construction company Saint Gobain might bid for it if its attempt to acquire British plasterboard manufacturer BPB fails. But a bid from Saint Gobain is unlikely because the company is one of several, including Pilkington, being investigated by the European Commission over allegations of price rigging. The investigation relates to an energy surcharge levied by all the companies. Pilkington has been in play for months, if not years.
The company’s share price has fluctuated wildly over the last few months as takeover speculation has mounted.
Shore Capital analyst John Bell said: “I was surprised by it, I thought that if somebody was going to make a bid, they would have done so by now.” Nippon has owned a substantial stake in the company — more than 20 per cent — since 2001.
Bell added that although Nippon faced no regulatory hurdles, there were few obvious synergies in the tie-up there is little geographical cross-over.
Neither company would give any indication of the price at which a deal could be done. Analysts said a merger could be worth up to £2bn.
