Kingspan Moves On After Recticel Rejects Buy Offer

Originally published by: ReutersMay 3, 2019

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Kingspan has moved on from its discussions with Recticel over bids for a part or whole of its Belgian rival and sees little hope of a deal being revived, the Irish insulation company’s chief executive said on Friday.

Recticel last week rejected a 700 million euro bid for its two main foam and insulation businesses, and disclosed that Kingspan had also approached it in relation to a possible offer for the entire group.

Kingspan had in fact twice reached agreement to progress to due diligence on a takeover before instead attempting to select the assets it really wanted, CEO Gene Murtagh said on Friday.

Recticel said last week that the approach for the entire group was made at 10 euros per share.

“We had agreement. On two occasions in fact and it’s when that fell through that we made the probably less friendly approach and the conclusion of that was quite predictable,” Murtagh told the company’s annual shareholder meeting.

“I wouldn’t hold out much hope at all (of the deal being revived). It would have been a nice bolt on, but it wasn’t to be... We’ve moved on. Plenty more fish to fry.”

Murtagh said Kingspan first approached Recticel “to do something” in 1994 when his father, current chairman Eugene Muratagh, was in charge.

Kingspan has spent just over 1 billion euros on acquisitions over the last two years, mainly building up a presence in North, Central and South America, while also strengthening its grip on the European insulation market.

Murtagh told reporters after the meeting that Kingspan had a pipeline of potential acquisitions and the capacity to spend 400 to 500 million euros a year on deals.

Acquisitions helped drive Kingspan’s first quarter sales up 18 percent to just over 1 billion euros, the Cavan-based company said on Friday.

While it anticipated “reasonably positive momentum” through the second quarter, it also flagged that insulated panel orders in the United Kingdom, where it generates around a fifth of its sales, have been relatively subdued.

Murtagh said that as long uncertainty prevailed in the UK regarding its departure from the European Union, investment decisions will be curtailed.