RPC Shares Surge Most on Record on Talks With Apollo, Bain

(Bloomberg) -- RPC Group Plc, one of Europe’s biggest packaging makers with a market value of $3.6 billion, rose the most on record after the U.K. firm confirmed it’s in talks to sell itself to private equity firms Apollo Global Management LLC or Bain Capital.

The discussions are preliminary and may not result in an offer for the company, RPC said in a statement Monday in response to a Bloomberg News report that the company was considering strategic options. The U.K. company is holding talks with advisers following interest from potential buyers including buyout firms, Bloomberg reported Saturday, citing people familiar with the matter.

The shares surged 21 percent to 830.20 pence at 8:35 a.m. London time.

RPC, based in Rushden in Northamptonshire, England, makes packaging for food and cosmetics among other products. Its shares had declined 22 percent this year before Monday, valuing the company at 2.8 billion pounds. Any deal would come amid a wave of industry consolidation and global economic growth. Australia’s Amcor Ltd. agreed last month to acquire U.S. competitor Bemis Co. in an all-stock deal valued at $5.26 billion and DS Smith Plc agreed in June to buy Spanish packaging supplier Europac.

The British company, whose origins date to 1991 with a management buyout of five manufacturing sites in the U.K. from SCA, now has about 25,000 employees in more than 30 countries, according to its website, and reported full-year revenue of 3.75 billion pounds, according to a statement.

RPC has been a serial acquirer to grow the business, announcing the acquisition of Nordfolien GmbH this year, Letica Group in 2017 and ESE World B.V. the year before.

At the same time, it has faced some headwinds from analysts and short sellers. Equity analysts at Northern Trust Capital Markets in June raised "red flags," citing concerns about underlying profit and free cash flow as well as the impact from consumers moving away from plastic.

RPC short interest as of Sept. 6 was 5.2 percent of the shares available for trading, according to data from IHS Markit Ltd. Disclosed shorts include PSquared Asset Management, Blackrock, Portsea Asset Management, Old Mutual and Capeview Capital, according to data compiled by Bloomberg.

RPC is working with Rothschild, Credit Suisse Group AG and its corporate brokers, Jefferies Financial Group Inc. and Deutsche Bank AG, according to today’s statement.

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