Shares in RPC rocketed on Monday after the plastic packaging firm confirmed it is in talks with Apollo Global and Bain Capital regarding a potential takeover of the company.
Responding to media speculation, RPC said it is in “preliminary discussions” with the private equity firms, who have until October 8 to either announce “firm intention” to make an offer or step back.
RPC cautioned the talks “may or may not” result in an offer for the company.
Shares jumped over 20% to 830p per share off the back of the news.
The plastics market has been hit this year by rising awareness of pollution linked to the material and resultant policy changes, such as charges for plastic bags.
Earlier this year, RPC said it would sell its Letica food packaging business as part of a cash raising initiative that will help return more money to shareholders.
Harry Philips, analyst at Peel Hunt, said: “The next month will be pivotal for RPC.
“If there is no bid, the bears will take hold, while if there is a bid we expect it to come at a healthy premium to Friday’s close of 684p but accept that the Bemis read across is ambitious given the lack of hard synergies available to the private equity bidders.”