Kingspan must name third party in €700m bid, says board of Recticel

Belgian player seeks more information on back-to-back deal for its foam division

Back-to-back deal: Kingpsan chief executive Gene Murtagh. Photograph: Cyril Byrne / The Irish Times.

Back-to-back deal: Kingpsan chief executive Gene Murtagh. Photograph: Cyril Byrne / The Irish Times.

 

Kingspan must name the third party to its €700 million bid for part of Recticel before its rival’s board can consider the Irish group’s offer.

Manufacturer Kingspan offered €700 million for Recticel’s insulation and flexible foam divisions this week, but said it would immediately sell the foam business should its bid succeed.

Recticel said on Thursday that its board has asked Kingspan to identify the third party that has agreed to buy the foam manufacturing unit in a back-to-back deal with the Irish group.

The Belgian company said that Kingspan’s offer lacked some “critical information” that its board needed to make an informed decision on the bid and has sought this from the Irish manufacturer.

The requests include the “identity, rationale, (inter)conditionality, anti-trust risks and consideration in respect of the non-identified third party” to which Kingspan has agreed to sell the foam division.

Recticel’s questions also deal with how Kingspan intends mitigating any competition law risks associated with its offer and the tax implications for the Belgian company’s shareholders.

Further analysis

“Upon receipt of this information from Kingspan, Recticel’s board of directors will further analyse the offer in line with its fiduciary duties and update the market when appropriate,” the company said.

Kingspan’s offer needs the board’s backing and competition regulators’ approval to succeed.

The Cavan-based insulation specialist, led by chief executive Gene Murtagh, did not name the buyer it has lined up for Recticel’s foam unit when it announced its bid.

Analysts suggest that Recticel’s insulation business, the more profitable of the two, could cost Kingspan between €350 million and €400 million.