SHARES in Rexam soared yesterday after the British can maker confirmed plans to sell its beverage and specialties arm in a deal that could be worth £200m.
The shares rose nearly five per cent in early trading, before closing the day up 3.4 per cent from Friday’s close at 368.9p.
Rexam is believed to have appointed Barclays Capital as advisers on the deal, and final bids for the business unit – which makes lids for drink and food containers – are expected this week. Bankers have long said Rexam is an attractive target for takeover.
A Rexam spokesman said that the company was considering options for the unit.
Rexam was the top FTSE 100 climber just ten days ago when its stock rose following news that it had completed contract negotiations in North America, and signed a long-term contract with its largest Brazilian customer.
Following the completion of these negotiations the company forecast that overall operating profit in its Beverage Can North America division in 2011 is expected to remain comparable to that in 2010, as improved pricing, new customers, continued growth in specialty cans and further cost control initiatives will offset the impact of lower net 12 ounce volumes.
As a result of the negotiations, Rexam has diversified the customer base for all can sizes and has signed medium-term contracts to recover most of the 2011 volume loss by 2013.
The company is scheduled to release its preliminary results for 2010 on 23 February.
In a trading update from November, chief executive Graham Chipchase said the company expected its results in the second half of 2010 to be similar to those of the first.
City A.M. Reporter