Recticel rejects Kingspan’s offer; remains open to takeover bids

Belgium PU foam maker Recticel has rejected an unsolicited, non-binding US$791 million offer from Ireland’s insulation company Kingspan Group to acquire its insulation and flexible foams divisions. But Recticel added that it is still open to a takeover given the price is right.

The company’s board unanimously turned down the offer adding that “engaging with Kingspan in this respect was not in the interest of its stakeholders.”

Insulation specialist Kingspan made the unsolicited approach and had also agreed separately with Austria-based Greiner to sell the flexible foam business to the company after acquiring it from Recticel.

Recticel rejected the offer citing negative tax consequences for it and its shareholders. It said, “A sale of the insulation and flexible foam divisions is not in line with Recticel’s strategy.”

It also said that the standalone value of the two units has been “significantly underestimated”. It would also leave Recticel “with a significantly reduced business focusing on bedding and automotive only with a significantly lower consolidated revenue and (earnings)”.

The Brussels-based firm also raised concerns that the offer would trigger regulatory risks saying that the back-to-back agreement with Greiner raises a number of concerns that have not been addressed in a satisfactory way by Kingspan or by Greiner.

However, Recticel said it was open to a better offer, adding, “The board remains open to consider and engage with Kingspan to discuss a possible acquisition of all outstanding securities of Recticel, at the right terms and conditions, in line with its fiduciary duties.”

Kingspan responded that it noted the views expressed by Recticel and that it had nothing further to add. Analysts have noted that Kingspan will not make a revised offer.

Recticel has four plants in Europe, in Belgium, France, Slovenia and the UK, while Kingspan also has plants in Belgium, France and the UK and a total of 19 foaming plants across Europe.