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Last Updated: Wednesday, 3 August 2005, 16:08 GMT 17:08 UK
Hostile bid for plasterboard firm
Plasterboard in the Guggenheim
BPB's plasterboard was used in the Guggenheim Museum in Bilboa
The world's biggest plasterboard manufacturer, BPB, has received a hostile takeover approach from French building materials firm Saint-Gobain.

The move comes after BPB rejected a bid from Saint-Gobain for 3.68bn ($6.5bn), saying it undervalued the UK firm.

In response, Saint-Gobain said it had no choice but to seek approval for the bid directly from shareholders.

Saint-Gobain said it was "very disappointed" at the refusal of BPB to discuss a friendly takeover.

"In the face of this inability to reach a private agreement, Saint-Gobain now has no option other than to put its proposal to BPB shareholders," the company said.


Two weeks ago BPB rejected a potential 675 pence offer from the French group and has now similarly rebuffed its latest 720 pence a share approach, calling it "unwelcome".

On Wednesday, BPB attempted to woo its own shareholders with plans to return over 350m - equivalent to 70 pence a share - in cash. It also said it would increase the dividend for the year to March 2006 by about 44% to 23 pence a share.

Saint-Gobain, 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.

The French suitor operates in more than 49 countries and gained its first foothold in the UK when it bought pipe maker Stanton - now called Saint-Gobain Pipelines - from British Steel in 1985.

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

Shares in the company rose 26 pence, or 3.7%, to 734p on news of the bid.

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