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Rexam ShareCast News (REX)
ShareCast News for Rexam (REX)
| Share Price: 523.50 | Bid: 523.00 | Ask: 524.00 | Change: 0.00 (0.00%) |  | ||||||
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Rexam to sell Personal Care business in two parts
Tue, 3rd Jul 2012 13:23
Rexam, the global consumer packing company, is proposing to sell its Personal Care business in two parts and return the majority of the proceeds to its shareholders.
The Cosmetics, Toiletries and Household care products unit (CTH) and the High Barrier Food packaging division (HBF) will be sold for a combined total of $709m in cash (£452m at current exchange rates).
A binding offer of $459m has been recieved from an affiliate of Sun Capital Partners for CTH, while a subsidiary of Silgan Holdings has agreed to acquire HBF for $250m, also in cash.
The transactions are expected to complete in the third quarter of 2012 for HBF and the fourth quarter of 2012 for CTH and are conditional on certain regulatory approvals.
As a result of the sale, Rexam will carry out a restructuring programme to remove residual overheads which, together with certain separation costs, will result in exceptional charge of some £40m in 2012, of which £25m will be cash costs. Going forward, there will be £7.0m of annual retained fixed costs which will be absorbed by the Beverage Cans and Healthcare businesses.
In total, the Personal Care business employs some 7,000 people in Europe, the US and Asia. In 2011, the business had sales of £502m and underlying operating profit of £38m before central overheads (CTH: £26m and HBF: £12m). As at 31 December 2011, it had gross assets of £650m (CTH: £611m and HBF: £39m) and liabilities of £112m (CTH: £103m and HBF: £9.0m).
It is expected that there will be an impairment charge of some £200m at the half year arising from the sale of CTH, which will be broadly offset in the second half by a gain on the sale of HBF, associated foreign exchange gains and tax credits.
Following the completion of the sales, Rexam plans to return around £370m (at current exchange rates) to shareholders which it is anticipated will be effected by way of a redeemable B share scheme together with a share consolidation.
The move was welcomed by the market on Tuesday afternoon, with shares trading 2.31% higher at 433.4p by 14:36.
NR
The Cosmetics, Toiletries and Household care products unit (CTH) and the High Barrier Food packaging division (HBF) will be sold for a combined total of $709m in cash (£452m at current exchange rates).
A binding offer of $459m has been recieved from an affiliate of Sun Capital Partners for CTH, while a subsidiary of Silgan Holdings has agreed to acquire HBF for $250m, also in cash.
The transactions are expected to complete in the third quarter of 2012 for HBF and the fourth quarter of 2012 for CTH and are conditional on certain regulatory approvals.
As a result of the sale, Rexam will carry out a restructuring programme to remove residual overheads which, together with certain separation costs, will result in exceptional charge of some £40m in 2012, of which £25m will be cash costs. Going forward, there will be £7.0m of annual retained fixed costs which will be absorbed by the Beverage Cans and Healthcare businesses.
In total, the Personal Care business employs some 7,000 people in Europe, the US and Asia. In 2011, the business had sales of £502m and underlying operating profit of £38m before central overheads (CTH: £26m and HBF: £12m). As at 31 December 2011, it had gross assets of £650m (CTH: £611m and HBF: £39m) and liabilities of £112m (CTH: £103m and HBF: £9.0m).
It is expected that there will be an impairment charge of some £200m at the half year arising from the sale of CTH, which will be broadly offset in the second half by a gain on the sale of HBF, associated foreign exchange gains and tax credits.
Following the completion of the sales, Rexam plans to return around £370m (at current exchange rates) to shareholders which it is anticipated will be effected by way of a redeemable B share scheme together with a share consolidation.
The move was welcomed by the market on Tuesday afternoon, with shares trading 2.31% higher at 433.4p by 14:36.
NR
London midday: Markets snap four-day losing streak
Developments in the Eurozone were supporting stocks on Thursday morning as markets rebounded to snap a four-day losing streak.[18 Apr '13]
London open: Stocks edge higher early on
UK stocks edged higher on Thursday morning, snapping a four-day losing streak, despite some weakness in the heavyweight mining sector.[18 Apr '13]
London pre-open: Modest rise forecast for FTSE
City sources predict the FTSE 100 will open up three points from yesterday's close of 6,244.[18 Apr '13]
Rexam trading in line
Consumer packaging giant Rexam said results since the start of January have been in line with company expectations and, while volume growth has been slower than predicted towards the end of the quarter, it expects to make further progress this year.[18 Apr '13]
Thursday broker round-up UPDATE
Aviva: Bank of America cuts target price from 350p to 335p, while its neutral rating remains unchanged.[4 Apr '13]
FTSE 100 movers: Vodafone leads the way higher
Vodafone's shares surged following reports that Verizon and AT&T were working on a break-up bid for the British firm. The two US telecoms groups are said to be considering a deal that would see them pay a 40% premium to Vodafone's share price at Monday's close, sources told FT Alphaville.[2 Apr '13]
Sector movers: Industrials lower as RPC warns of challenging conditions
Industrial stocks were among the worst performers of the day on Thursday after a gloomy trading update from RPC Group weighed on the sector.[28 Mar '13]
Tuesday broker round-up UPDATE
Abcam: Investec raises target price from 466p to 484p and keeps a buy recommendation. Numis revises target price from 470p to 530p and maintains its buy ratng.[5 Mar '13]
