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Last Updated: Sunday, 13 November 2005, 15:46 GMT
French group 'to raise BPB offer'
Petronas Towers in Kuala Lumpur, Malaysia
BPB products have been used in many major building projects
French group Saint-Gobain is set to up its bid for UK plasterboard-maker BPB to 3.8bn ($6.6bn), reports suggest.

The new offer would represent a 5.5% increase on its previous offer of 720p a share to 760p per share.

Building materials firm Saint-Gobain has until Friday to win approval from the BPB board for a takeover.

But raising the bid to 3.8bn may not be enough as BPB rejected the last 720p a share offer from Saint-Gobain, saying it massively undervalued the firm.

Instead BPB's board claims the group is worth at least 800p a share.

Bid hopes

A spokeswoman for Saint-Gobain declined to confirm the claims, but did add that the firm still hoped to strike a deal.

Press speculation suggests that the French group's board will meet on Monday to discuss raising its bid for BPB.

Saint-Gobain mounted its campaign to take over BPB in July when it tabled a 675p a share offer.

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

Saint Gobain has until Friday to raise its hostile offer for the firm. In order to secure a takeover it must win approval from 50.1% of BPB's shareholders.

Shareholders wooed

According to weekend press reports the French group has been arranging discussions with institutional investors in case its latest offer still fails to win approval from BPB's board.

Hedge funds are believed to hold more than 20% of BPB's stock, having built up their holdings in the group since the takeover battle broke out in the summer.

If Saint-Gobain does go ahead and make a 760p a share offer that figure would represent a 26p premium on the company's closing price of 734p on Friday.

However, BPB has been working hard to rebuff Saint-Gobain's advances.

In October, it promised to hand back 600m to its investors through share buybacks and pledged to increase dividend payouts.

And last week, as it unveiled a 28.5% rise in first half profits to 185m, it warned its shareholders that the French firm was trying to snap it up "on the cheap".

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