Apollo’s £3.3bn buyout of RPC Group melts away as plastics giant turns to ‘superior offer’ from Berry Global

A US rival has hijacked the £3.3bn takeover of plastic packaging giant RPC Group by private equity firm Apollo Management.

RPC accepted an offer in January by private equity firm Apollo Global Management after months of negotiations, but this has been ditched in favour of a “superior offer” by Berry Global.

Read more: RPC's £3.3bn private equity buyout sparks shareholder rancour

Berry, another plastic packaging supplier, indicated last month it wished to make a counter-offer, but was given a deadline of 12 March to do so. On Friday morning RPC announced it had reached an agreement with Berry on an offer of 793p per RPC share – significantly more than Apollo’s offer of 782p per share. 

The firm's board has unanimously recommended Berry's offer, which values the firm at £3.34bn, to shareholders.

Before Berry stepped in, it looked as if a £3.3bn offer from Apollo was all but sealed, announced after months of wrangling and hours before the regulatory deadline. But it caused disquiet among RPC shareholders, some of whom felt they were getting a raw deal.

Under Apollo’s offer each RPC shareholder would get 782p cash for every share they own, 15.6 per cent up on the 683.6p closing price on 7 September, the last day before talks were confirmed.

The deal rankled Aviva Investors and Royal London Asset Management, both top 15 shareholders, who said the payout was not high enough given RPC’s future growth prospects.

When Berry emerged as a possible bidder, Craig Yeaman, fund manager at Royal London Asset Management, said: “Apollo were always going to run this risk having pitched the bid at this level which has clearly given others encouragement.

“Berry Global, being a competitor to RPC, would have plenty of synergies to go after and the first casualties could include senior management who were so willing to accept Apollo’s offer.”

A general meeting of shareholders had been convened for 20 March in relation to Apollo’s offer, but this has now been delayed for “an indefinite period”.

Read more: Apollo seals deal for £3.3bn takeover of packaging giant RPC

RPC said in a statement: “Following careful consideration, the RPC Board concluded that the terms of the Berry Offer represent a superior offer for RPC Shareholders as compared with the Apollo Offer.

“Accordingly, the board of RPC confirms that it has withdrawn its recommendation of the Apollo Offer and that it intends unanimously to recommend the Berry Offer to RPC shareholders.”