Plastic firm rallies after US hedge funds step in

Plastics company RPC Group got investors fired up as it confirmed it was in talks with two Us private equity firms.

the FtsE 250 company, which is one of Europe’s largest plastic packaging manufacturers, rocketed 18pc, or 123p, to 806.6p after admitting that it was in ‘preliminary discussions’.

though RPc warned that neither suitor may yet make an offer, investors’ expectations of a bidding war were ignited as they pushed the company’s market value up by £499.7m.

speculation about RPc’s future direction has grown in recent weeks, as its share price has been pushed down due to the shrinking popularity of plastic.

Even with yesterday’s rise, shares are down 6.2pc over the year to date.

and chairman Jamie Pike noted earlier this summer that some investors were unhappy with the level of debt RPc was thinking of taking on, which was constraining its ability to grow.

Harry Philips, an analyst at broker Peel Hunt, said that having two potential bidders sniffing around RPc is a ‘ good starting point’. He added that australia’s amcor, the world’s largest packaging company, bought Us rival Bemis for a hefty valuation last month, which demonstrates RPc at its current market value ‘is a much mispriced stock’.

On the FtsE 100, anglo-Dutch media and analytics company

Relx announced it had completed its move to the UK. Unlike Unilever, which has decided to combine its UK and Netherlands arms in Rotterdam and is asking shareholders to approve the move, Relx has brought its business to Britain. this caused its market value in london to nearly double to £33m, as shares in the Dutch entity were added to the UK listing. Yesterday shares were up 0.9pc, or 14.5p, at 1666p. Meanwhile, Associated British

Foods, which owns clothing chain Primark and a host of grocery and sugar brands, found itself in a sticky spot. in a rare win for the struggling High street, Primark actually propped up the company’s sales in the face of lower sugar prices and a £20m currency hit.

John Bason, aBF’s finance director, said that sugar production in the EU ‘is going through a very painful period of restructuring’.

last year the EU removed quotas which had limited the production of sugar beet and held up prices. Following that, producers rapidly upped their output.

Bason said: ‘those two things combined have caused the price of sugar to fall by more and faster than we had expected.’

However, he denied that the conglomerate relies too heavily on Primark to hold up its results.

While many companies have been leaning on online shopping sites to make up for gloom on the High street, Primark is one of the few retailers to still not offer a website service. Nevertheless, it is faring far better than many of its peers.

Eliminating the effect of currency swings, Primark’s sales grew by 5.5pc, but at stores open more than a year they declined by 2pc.

aBF blamed a cold start to the year and an unusually hot summer for impacting the chain’s sales across northern Europe.

Despite traditional retailers’ woes, Bason said the plan is to stick with the High street.

Primark will open its largestever store in Birmingham next year, even after adding another 15 to its total this year.

But looking at aBF’s performance as a whole, investors seemed mildly disappointed. shares fell 0.6pc, or 13p, to 2257p.

the FTSE 100 ended the day a fractional 0.02pc higher, or 1.6 points, at 7279.3 points, as simmering trade tensions continued to weigh on miners.