NSG may bid for Pilkington

Japan's Nippon Sheet Glass is discussing a takeover of glassmaker Pilkington at more than 160 pence a share, sources familiar with the situation said on Wednesday.

A deal, which at that price would value Pilkington at more than 2.1 billion pounds, could come as early as next week, the sources said.They added that the talks could yet fall apart or the timetable change as the parties continue to haggle over price, among other issues.The offer, if it goes ahead, will be an improvement on the indicative cash offer worth 158p a share made in December, which Pilkington rejected.Pilkington said then that the price, which was raised from the initial offer worth 150p and a second verbal proposal at 155p, still fell short of a level that it would be prepared to recommend.Pilkington and Nippon Sheet Glass, which already owns 20 percent of Pilkington, both declined to comment.Shares in Pilkington shares were at 157-1/2p at 9:43 a.m., up 1 percent.Pilkington shares have climbed around 20 percent since late August when the first bid talks emerged, moving roughly in line with the building materials sector FTASX2350>, which has seen a flurry of mergers and acquisitions in recent years.

The approach is the latest foreign raid on Britain's construction sector, after France's Saint-Gobain bought plasterboard maker BPB, Mexico's Cemex snapped up concrete producer RMC and Swiss cement firm Holcim swooped on Aggregate Industries.

In the global glass market, where demand is seen growing some 4 percent annually, Pilkington faces challenging conditions as it generates more than half of its revenues from a mature European market, while rising raw material and energy prices put pressure on costs.

But the group, which competes with Saint-Gobain and Japan's biggest glass maker Asahi Glass <5201.T>, reported a 22 percent rise in pretax profit for the first half to end-September, helped by a restructuring drive.

The 180-year-old Pilkington is poised to enter the final stage of a three-year turnaround, having slashed costs and cut its workforce by 15,000 staff to 24,000 since the mid-1990s as it focuses on its main car and construction markets.

600450 NSG may bid for Pilkington glassonweb.com
Date: 19 January 2006
Source: Scotsman.com

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