THE Irish glass and metal packaging group Ardagh is lining up a multibillion-dollar bid for assets being sold as a result of a merger of industry rivals Ball and Rexam.
The heavily indebted company told bond analysts last week that it had funding in place to make a $3bn (€2.7bn) offer for the 12 plants being offloaded to satisfy EU and US competition requirements. Ardagh is expected to submit a binding offer later this month.
Other prospective bidders are believed to include private equity firms Apollo Global Management, Madison Dearborn Partners and Blackstone Group. The assets are in North America, Europe and Brazil.
Ardagh chief executive and founder Paul Coulson confirmed Ardagh was “looking at the assets to be divested out of the Ball/Rexam merger”.
He added that the portfolio of assets was “very complementary for our group and we think can drive forward EBITDA growth.
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“We have good synergies with that business through our existing businesses in North America and in Europe.”
He said Ardagh, which has debts of €5.4bn, was “very conscious” of not becoming overleveraged.
“It is three years now since we bought anything, so we are very conscious of making sure that we create value for our stakeholders, our bondholders and our shareholders. We wouldn’t go into something without knowing how we’d do it . . . If we want to do it, we will be able to finance it.”
Ardagh, whose customers include Heineken, Diageo and Coca-Cola, late last year pulled the flotation of its metal can packaging division Oressa. Any bid for the Ball/Rexam assets would not be dependent on an Oressa IPO.
After Coulson’s comments, Societe Generale downgraded its recommendation on Ardagh’s 2022 euro-denominated bond to “hold” from “buy” over concerns that the company would to become more aggressive in its M&A strategy.
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Ardagh, which emerged from the former Irish Glass, is one of the biggest players globally in metal packaging, as a result of its purchase of Impress Packaging for €1.7bn in 2011.