Under the terms of the offer, BSS shareholders will receive 232.91 pence in cash, 0.2608 new Travis Perkins shares per BSS share and the payment of BSS’s final dividend for the year ended 31 March 2010 of 6.09 pence.
This offer values each BSS share at 433 pence, which is around 33 per cent above the level the shares ceased trading at the day before the deal was announced.
In a statement released to the stock exchange, Travis Perkins said: “The board of Travis Perkins has, for some time, believed that further consolidation in the UK building materials merchanting sector offers significant scale benefits in terms of cost savings and improved operational efficiency to those that proactively participate.”
“In addition, Travis Perkins believes that the recession has accelerated the long-term trend of customers’ increasing use of different distribution channels to source building materials. Against this backdrop, Travis Perkins believes there is a powerful strategic logic which underpins a combination of Travis Perkins’ plumbing and heating activities through its existing distribution and retailing businesses with BSS.”
The take over is likely to be reviewed by the Office of Fair Trading, which Travis Perkins does not see as a barrier to any deal going ahead.