By Esha Vaish
Feb 5 (Reuters) - Shares in Rexam Plc, the world'ssecond-largest beverage can maker by revenue, rose as much as 12percent after two UK newspapers reported there was marketchatter about U.S. private equity firms' potential interest inthe company.
The Independent said on Thursday there were rumours thatRexam was a potential takeover target for U.S. private equityfirms. The Times added there were also talks that any deal couldbe at "generous-sounding premiums". (http://thetim.es/1Cxovtu)(http://ind.pn/1vtWgtH)
Neither report gave details about a possible price orpotential suitors for the company, which makes aluminium cansfor companies such as Coca-Cola Co, Anheuser-Busch InBev and Heineken NV.
Rexam could fetch between 520 pence per share and 550 penceper share, Thomas Picherit, an analyst at independent researchfirm Alphavalue, told Reuters, valuing the company at 3.87billion pounds at the top end of the range.
At Thursday's high of 499.8 pence, Rexam had a marketcapitalisation of 3.52 billion pounds. The stock was up 6.5percent in morning trading, adding to the 5.3 percent gains overthe past three days since hitting a two-year low on Friday.
A spokesman for Rexam declined to comment on the reports.
"Private equity has in the past taken significant interestin the glass bottle industry and in the food can industry, bothof which are very mature," Jefferies analyst Sandy Morris said.
"The logic is if the beverage can industry is also becomingmature it would be a natural market for private equity to play."
Morris said industry consolidation would be difficult due toantitrust issues as the top three beverage can makers in theworld, Rexam, Ball Corp and Crown Holdings Inc,control more than half the market.
Rexam and Ball Corp each controlled about 21 percent of theglobal market in 2014, while Crown held a 19 percent share,Vertical Research Partners said in a note in December.
Morris added, "Therefore the prime suspects would be privateequity." (Reporting by Esha Vaish in Bengaluru; Editing by SavioD'Souza)
