RPC Group’s £3.3bn private equity takeover sparks disquiet among top shareholders

Private equity firm Apollo Global Management’s £3.3bn buyout of packaging manufacturer RPC Group has sparked a row among investors, who feel they are getting a raw deal.

Each RPC shareholder will 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.

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

But the deal has rankled at least one of RPC’s top 15 shareholders – Aviva Investors said this afternoon the payout was not high enough, given RPC’s future growth prospects.

David Cumming, Chief Investment Officer for Equities at Aviva Investors, said: “We do not agree with the justifications put forward by the RPC board for their acceptance of an offer for the company by Apollo.”

“The exit valuation clearly underestimates future growth prospects that will now accrue to the buyer and the RPC management team. In our view, this protracted bid process has not delivered fair value to RPC’s shareholders,” he said.

Despite Aviva’s grievances, RPC’s stock was up 4.36 per cent this afternoon, valued at 766p. 

Morning Wire understands RPC is unaware of any other shareholders who have been irked by the deal, but Nicholas Hyett, analyst at Hargreaves Lansdown, said it was “potentially disappointing for investors”.

“A 15.6 per cent 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.”

Read more: RPC extends deadline again for private equity suitors

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.”