Travis Perkins has confirmed that an agreement has been reached on its proposal to take over plumbing and heating merchant The BSS Group.
The company will acquire the entire issued and to be issued share capital of BSS for cash and shares, with the recommended acquisition valuing each BSS share at 435.8p.

Consideration for each BSS share is 232.91p in cash, 0.2608 new Travis Perkins shares valued at 196.8p and payment of the BSS final dividend of 6.09p for the year ended March 31, 2010.

The offer values BSS's issued and to be issued share capital at approximately £557.6m. The acquisition is subject to approval by Travis Perkins and BSS shareholders, the Court and the Office of Fair Trading, and is expected to become effective in the middle of the fourth quarter of 2010.

Travis Perkins chairman Robert Walker said: "We believe that there is a strong strategic rationale for the acquisition of BSS which will create the leading plumbing and heating trade and retail distribution business in the UK. Our respective businesses are complementary and we look forward to working with BSS's customers, suppliers and employees. We are confident that this transaction can deliver significant value for the shareholders in the enlarged group."

Travis Perkins published its trading update on Friday, July 2 for the six months to June 30, 2010. According to the report, group revenue was up by 4.7% for the period, with like-for-like (lfl) sales up 3.4%. Lfl turnover for the past two months is 10.3% ahead in merchanting and, for the past nine weeks, 1.6% ahead in retail.

Revenue for the company's retail division, made up largely of Wickes, increased by 2.1% on a delivered basis for the 26 weeks to June 30. Lfls declined by 0.4% compared to the same period in 2009.

The report said: "Wickes continues to gain market share and maintained gross margins over this period. As previously indicated, the rate of market share gain will begin to abate through 2010 as Wickes' new strategy in the kitchen and bathroom market begins to mature."

The company expects to report a result for the period ahead of management expectations.

Travis Perkins chief executive Geoff Cooper said: "We are pleased with the overall progress the group has made in the first six months of the year. Current trading continues to be ahead of management expectations and we now have the confidence to contemplate recommending paying dividends."