Swedish beverage packaging producer PLM is to raise capital through an offering of stock to the shareholders of its parent, Industrivarden, an industrial holding company.
The decision followed the re…
Swedish beverage packaging producer PLM is to raise capital through an offering of stock to the shareholders of its parent, Industrivarden, an industrial holding company. The decision followed the rejection in October 1995 by the holding company of a SKr 4.3 billion (US$ 622.3 million) bid for PLM from American-based Ball Corp. Before the bid was announced, PLM was expected to unveil an international flotation of stock. “After evaluating the two options, the board decided to offer holders of shares and convertibles in Industrivarden the opportunity to acquire the equivalent of 55% of the shares in PLM,” Industrivarden said. Trading began at the Stockholm bourse on 13 November 1995. The company added that it would float a further 20% of the company “when PLM“s share price stabilises and market conditions are regarded as suitable.” Investors are offered one PLM share at SKr 74 for every two existing shares held in the holding company for an estimated market capitalisation of PLM of around SKr 3.2 billion. The value of Ball“s bid beats this figure but a majority of PLM“s shareholders were against the takeover, believing there would be few synergies between the two groups“ US and Swedish activities. Those in favour of the takeover included SCA, the Swedish forestry company, and AGA, the gas company, which together control 25% of PLM. Ball attempted to increase the value of its bid, but failed to do so as a result of a fall in its own stock price. A sizeable portion of the deal involved putting its own stock up as part of the finance.