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2007-02-09 News Release
Packaging provider reports
on takeover offers
Packaging solutions provider SIG issues a report on the takeover offers
of CVC FERD and Rank Group, and announces preliminary profit boost up
by 53 percent.
In fulfillment of the legal requirements, the SIG Board of Directors
today issued reports for the attention of its shareholders on the takeover
offers of Romanshorn S.A. (controlled by “CVC/FERD”) and the
Rank Group Ltd. (“Rank”). The Board of Directors refrains
from making a recommendation either in favor of or against the CVC/FERD
offer of CHF 400.— per share. It recommends the shareholders to
reject the Rank offer of CHF 370.— per share. Furthermore, the Board
informs that, to the best of its knowledge, no other bidders remain in
the auction process apart from CVC/FERD and Rank. In the context of these
reports, SIG is also announcing its preliminary financials for the year
2006, which indicate a remarkable increase in net profit to CHF 66 million
(+53% over 2005).
Find Information and Suppliers of PET
bottles.
CVC/FERD: realistic price level, pending antitrust review
The Board of Directors refrains from a recommendation in favor of or against
the CVC/FERD offer of CHF 400.— in cash per share which was formally
announced on January 5, 2007. While, in the view of the Board, the offer
price is at a realistic level for those shareholders who want to cash
out their investment in the company and are not focused on capturing the
future value creation potential as outlined in the business plan published
in October 2006, the still pending review process of the EU antitrust
authorities, combined with the conditions of the offer, imply a risk that
CVC/FERD may not be able to ultimately complete the transaction.
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SIG juice beverage cartons
packaging solutions. Click
Go for larger image. photo: SIG |
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Based on an analysis undertaken by the SIG Board of Directors together
with its legal and financial advisers, the outcome of the EU antitrust
review cannot be predicted with sufficient certainty. Should the EU antitrust
authorities seek to either block the transaction or subject its clearance
to conditions that breach the thresholds set out by CVC/FERD in its offer,
CVC/FERD would be allowed to dismiss the offer. In such a scenario, the
offer would not close and the shares would remain with the shareholders.
At that time, the SIG shareholders would no longer be able to tender their
shares into the competing offer from Rank.
It should also be pointed out that Rank can submit a higher offer to the
SIG shareholders up to five days before the end of the main offer period.
Hence, the Board of Directors is unable to make any statement to its shareholders
on whether the CVC/FERD offer of CHF 400.— per share represents
the highest achievable price. Given these considerations, the SIG Board
of Directors refrains from issuing a recommendation in favor of or against
the CVC/FERD offer.
Rank: offered priced too low
The SIG Board of Directors has carefully reviewed the offer of CHF 370.—
in cash per share which was announced by Rank on December 19, 2006. Whereas
the Board is of the view that Rank has the ability to complete the transaction,
it is convinced that the offered price of CHF 370.— does not reflect
the inherent value of SIG. Consequently, the Board of Directors recommends
its shareholders to reject the Rank offer on the basis of it being too
low.
Remarkable increase in 2006 net profit by 53%
As part of the above-mentioned reports, SIG is also announcing preliminary
financials for 2006 (unaudited). With sales of EUR 1,349 million (+ 12%
over 2005), earnings before interest and taxes (EBIT) of EUR 108 million
(+ 42% over 2005, before one-off items) and a net profit of EUR 66 million
(+ 53% over 2005), SIG is fulfilling its forecasts which were increased
in October 2006 for the second time. Despite continued and significant
investments in the growth of the company (at lower depreciations) and
release of provisions for the cost reduction programs, the free cash flow
was maintained at a high level of EUR 73 million (2005: EUR 77 million).
Given the strong operating performance in the past year, the net debt
decreased by 53% to EUR 30 million (2005: EUR 64 million). The complete
and audited financial statements for 2006 will be published on March 6,
2007.
SIG, listed on the Swiss Exchange SWX (SIGN, security no. 1202249), is
a global provider of packaging solutions. Its product range includes the
manufacture of cartons for beverages and food products, as well as machinery
for the aseptic and non-aseptic filling of packages (SIG Combibloc division).
In the PET sector, equipment for the production, coating and filling of
plastic bottles completes the product spectrum (SIG Beverages division).
In the coming years, SIG expects to grow its sales above the industry
average: 2008/2009 by over 10% and an annual average of 8% for the period
2009-2014. The more moderate growth forecast for 2007 reflects the expectation
that the long forecasted partial substitution of cartons by PET bottles
in the German juice segment will now commence this year. SIG is confident
that in the coming years, the EBIT margin of SIG Combibloc will sustainably
exceed 10%, translating into double digit margins at Group level in the
medium term.
Find information about SIG
Holding AG.
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