The share price of Boxmore International, the Northern Ireland quoted packaging group, continued to surge yesterday following confirmation of a bid by Chesapeake, a US manufacturer of speciality packaging.
They rose to 264.5p sterling, up 58p, a 28 per cent increase. The share price has now risen by 71 per cent since Monday when Boxmore announced it had received an approach that may or may not lead to an offer.
The consideration of 265p sterling cash per share - just above the last quoted price - offered by Chesapeake, values Boxmore at £191 million sterling (€308 million) and is on a prospective p/e of 18.
It is being recommended by the board which controls 6.6 per cent of the equity.
The biggest director shareholder is Mr Harold Ennis with around 3.3 million shares, worth £8.7 million. Chief executive Mr Mark Ennis has 1.3 million shares, worth £3.5 million.
Boxmore shareholders will also receive a second interim dividend of 2.59p per share.
The offer contains a loan note alternative but this is up to a maximum of £110 million.
There has been a shift in the stakes held by institutions over the past few months.
Canada Life and Schroder Investment Managers each sold just under 1 million shares. Gartmore sold over 1 million shares.
They have lost out by selling.
Other institutions have been more fortunate. Recent buyers included Barclays Global Investments which bought 1.6 million shares while Threadneedle Asset Managers bought over 1 million.
A Chesapeake spokesman said he believed the bid had been "well received" by the institutional investors.
The largest shareholders, according to the share register, are Standard Life with 5.3 per cent, Bank of Ireland 5.1 per cent, AIB Nominess 5 per cent, Prudential 4.4 per cent, Aberdeen 4 per cent and Franlington Investment Managers 3.3 per cent.
Mr Mark Ennis said Boxmore was a good fit for Chesapeake, and the two companies shared similar cultures.
Boxmore, in a statement, said the offer represented an opportunity for its shareholders "to realise their investment in Boxmore shares at a substantial premium".
Chesapeake believes that Boxmore's track record in delivering growth in its various business segments makes it an attractive addition to Chesapeake's European packaging business.
The amalgamation, it added, "will result in enhanced opportunities for both businesses".
Chesapeake, based in Richmond, Virginia, has a share listing on the New York Stock Exchange with a market capitalisation of $543 million (€541 million).
Chesapeake started to expand from its US base in 1996.
Its latest annual figures showed net sales of $950.4 million in 1998. Profit before tax and extraordinary items amounted to $55.8 million.
Sales in the nine months to September 1999 were $916.8 million.
Profits were $32 million while net assets amounted to $411.5 million.
