COD Compagnie De Saint-gobain

RNS Number:3263R
BPB PLC
15 September 2005


15 September 2005

                                BPB plc ("BPB")
                   Superior growth justifies a premium rating

BPB has noted Saint-Gobain's announcement of yesterday in response to the
posting of BPB's Circular.

BPB finds the statement that "Saint-Gobain was aware of the key elements"
surprising. The Circular contained a detailed full year 2005/06 profit forecast,
with underlying proforma EPS up by almost a third on 2004/05, exceeding market
expectations - a point acknowledged by Saint-Gobain. The Circular also contained
detailed information on BPB's markets, planned capacity increases and growth
plans which had not been previously published.

It also appears that Saint-Gobain's methodology is to value BPB by conveniently
excluding companies with EPS growth rates similar to BPB simply on the basis
that those peer companies trade at higher multiples. This fails to recognise the
relationship between superior growth and premium rating.

The European companies within the peer group (excluding BPB) have an average
2005/06 EPS growth forecast of 9.3%. By comparison, the US peer group companies
have a significantly higher average forecast EPS growth of 27.5%. This
illustrates that the capital markets generally attribute premium ratings to
companies with superior growth prospects. BPB's comparable EPS growth rate puts
it at the upper end of its peer group, which of itself justifies a premium
rating to the current year average PE multiple of 14.3x.

In addition, as set out in the Circular, BPB believes the following factors
further support the case for a premium rating:

* BPB is in the top quartile for prospective earnings growth in its peer
  group
* It is one of the few companies in its peer group with a global
  footprint and a No.1 market position worldwide
* It operates in a market where volume growth consistently and
  significantly exceeds GDP
* It operates in a consolidated environment where potential new entrants
  face high start-up costs in terms of technology, brand and intellectual property

Sir Ian Gibson, Chairman of BPB, said: "BPB has exceptional growth prospects and
a compelling case for a premium rating as an independent company. Saint-Gobain's
offer of 720p fails to recognise this and fundamentally undervalues BPB."


Enquiries

James Murgatroyd / Faeth Birch, Finsbury
Tel: +44 (0)20 7251 3801


N M Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated
in the United Kingdom by the Financial Services Authority, is acting as the
financial adviser to BPB and no-one else in connection with the matters referred
to herein and will not be responsible to anyone other than BPB for providing the
protections afforded to clients of Rothschild or for giving advice in relation
to such matters.

This announcement contains statements that are or may be forward-looking with
respect to the financial condition, results of operations and businesses of BPB.
These forward-looking statements include risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
There are a number of factors which could or may cause actual results or
developments to differ materially from those expressed or implied by such
forward-looking statements.


APPENDIX

Bases of Calculation and Sources of Information

1.1 Unless otherwise stated, the information contained in this announcement has
    been sourced from the circular to BPB shareholders dated 14 September 2005 (the
    "Circular").

1.2 The reference to BPB's peer group is based on the comparator group of 20 UK
    and international quoted construction and building materials companies
    identified by BPB's remuneration committee and stated in BPB's annual report and
    accounts for the year ended 31 March 2005, but excluding HeidelbergCement AG
    following the announcement by Spohn Cement GmbH on 10 June 2005 of its intention
    to submit a takeover bid to the shareholders of HeidelbergCement AG. The
    reference to BPB's peer group current year average PE multiple of 14.3x is
    therefore calculated by reference to the following 19 companies: Boral Ltd,
    Compagnie de Saint-Gobain SA, CSR Ltd, Florida Rock Industries Inc, Italcementi
    SpA, Kingspan Group plc, Martin Marietta Materials Inc, Rinker Group Ltd, Vulcan
    Materials Company, Cemex SA de CV, CRH plc, Eagle Materials Inc, Hanson plc,
    Holcim Ltd, James Hardie Industries Ltd, Lafarge SA, Pilkington plc, Societe
    Ciments Francais SA and Wienerberger AG.

    Share prices have been sourced from the London Stock Exchange Daily Official
    List, in the case of BPB and the other companies listed on the London Stock
    Exchange, and Bloomberg, in the case of the other companies, in each case as at
    the close of business in London on 9 September 2005 (being the latest
    practicable business day before publication of the Circular), except in relation
    to US traded shares, for which prices were sourced at the close of business in
    New York on 8 September 2005. The EPS figure for BPB for the year ending 31
    March 2006 has been sourced from the profit forecast set out in the Circular.
    EPS figures for the 19 comparable companies reflect consensus analyst estimates
    which have been sourced from Reuters (calendarised to a 31 March year end where
    appropriate).

1.3 The 2005/06 EPS growth rates for the 19 comparator companies referred to in
    this announcement, are sourced from consensus analyst estimates for EPS from
    Reuters (calendarised to a 31 March year end where appropriate).

1.4 The EPS growth forecasts of European companies are calculated by reference
    to the following companies: Kingspan, Ciments Francais, Wienerberger, Lafarge,
    CRH, Saint-Gobain, Italcementi, Pilkington, Holcim and Hanson.

1.5 The EPS growth forecasts of US companies are calculated by reference to the
    following companies: Eagle Materials, Florida Rock, Martin Marietta and Vulcan.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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