Short-seller backs Apollo’s £3bn RPC bid

A CITY doom-monger who placed a red flag on RPC Group believes investors in the plastics giant would ‘need their heads checking’ if they reject a £3.3billion takeover offer.

Fraser Perring, a former social worker turned ‘shortseller’, valued the FTSE250 firm’s shares at £4 late last year in a secret research report seen by The Mail on Sunday.

Last week, RPC bosses accepted a takeover offer from private equity giant Apollo at nearly double that amount – £7.82 a share – valuing the firm at £3.3billion.

Short-sellers such as Perring, who runs Viceroy Research, target firms that are believed to be overvalued on the stock market. They borrow shares from other investors, sell them and then hope to buy them back at a cheaper price, pocketing the difference.

Having shorted RPC, Perring appears to have an interest in Apollo’s takeover collapsing, because this would see the company’s share price fall.

But he told The Mail on Sunday last night: ‘Anyone who doesn’t accept this offer needs their head checking – and that’s coming from a short-seller who wants the share price to go down.’

Two major shareholders – Eminence Capital and Canyon Capital – have backed the deal. Smaller investors Aviva and Royal London said the deal undervalued RPC.

RPC Group will face shareholders this Friday when it presents a trading update to the City.