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Last Updated: Wednesday, 31 August 2005, 11:04 GMT 12:04 UK
BPB suitor sets out hostile bid
Petronas Towers in Kuala Lumpur, Malaysia
BPB supplied materials for Malaysia's famous Petronas Towers
French firm Saint-Gobain has formally launched a 3.6bn ($6.5bn) hostile bid for UK plasterboard maker BPB.

The hostile move came after BPB had previously turned down two approaches from Saint-Gobain, which owns the Jewson building materials chain.

Saint-Gobain sent a letter to investors on Wednesday setting out the 720 pence per share bid.

However, BPB told investors they should reject the offer, saying it "substantially undervalues" the firm.

"The board of BPB has no hesitation in reiterating its advice to shareholders to reject this unwelcome offer of 720p per share," BPB said.

This offer is an excellent opportunity for BPB shareholders to realize a cash exit from their investment now
Saint-Gobain statement

It added that it would be writing to investors within the next 14 days to set out why it recommended rejecting the offer.

Price premium

Saint-Gobain has upped its offer for the group to 720p per share after an earlier bid of 675p was rebuffed.

The French company, which makes ceramics, plastics and cast iron as well as glass, argues that a combined group would be rewarded with a presence in all the main global building materials markets.

Saint-Gobain said its latest bid represented a 40.5% premium to BPB's closing price of 512.5p on 20 July, when it made its initial approach.

"This offer is an excellent opportunity for BPB shareholders to realize a cash exit from their investment now," it added.

Saint-Gobain operates in more than 49 countries, employing 180,000 people.

BPB makes ceiling tiles and insulation materials and runs 90 factories worldwide, employing more than 12,500 staff.

In May, the company unveiled a 43.5% rise in full year, pre-tax profits to 258.7m.

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