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Last Updated: Wednesday, 5 October 2005, 16:10 GMT 17:10 UK
BPB sweetens hostile bid defence
Bluewater shopping centre, Kent
BPB has supplied materials for many major building works
UK plasterboard maker BPB has promised its shareholders more cash as a reward for supporting its defence against a French takeover bid.

BPB has said it will hand back 600m through share buybacks and has pledged to increase dividend payouts.

Hostile bidder Saint-Gobain is offering 3.6bn ($5.5bn) for the firm, but BPB has said that the bid "fundamentally undervalues" the company.

Saint-Gobain has received interest from less than 1% of BPB shareholders.

BPB said its full-year dividend will rise from 23 pence in 2005/6 to 30 pence by 2007/8.

"This equates to an 88% increase over three years, an average growth rate of 23% per annum," the company told shareholders.

New offer?

Before rejecting the 720-pence-a-share approach on 3 August, BPB brushed off a previous 675p-a-share offer on 22 July.

BPB will... continue to demonstrate its compelling case for a premium rating as an independent company
Sir Ian Gibson, BPB chairman

Now the French company, which owns the Jewson building materials chain, has until 3 December to make another move.

Saint-Gobain is keen to snap up BPB to expand its global presence, merging its insulation business with BPB's plasterboard operations.

The pressure is on for the French firm to raise its offer to a level which investors may find irresistible. Analysts believe a 770p-a-share offer could persuade investors to switch sides.

BPB operates 90 factories across the world, selling insulation and ceiling tiles in more than 50 countries.

Earlier on Wednesday, the Takeover Panel extended the deadline for BPB to publish information that could help its defence to 25 November.

"BPB will make good use of the extension to the offer timetable to continue to demonstrate its compelling case for a premium rating as an independent company," said chairman Sir Ian Gibson.

"The enhanced dividend payout and increased capital return are significant steps in this process."

Shares in BPB were down 2 pence to 739p by the close on Wednesday.

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