Montagu Private Equity, the leading European private equity house, has offered to aquire the Linpac Group for £860M.

The transaction has been structured through a newly established financing vehicle, Picnal Ltd, set up by Montagu and Linpac’s senior management team.

Under the terms of the contract, Montagu will take a majority equity stake in the business, alongside HSBC, advisers to Picnal, with a debt and mezzanine package from Deutsche Bank.

The offer, which has been recommended by the Linpac board, is subject to shareholder and regulatory consent and includes an option for the existing shareholders, senior management team and 12 000 employees to make a substantial reinvestment in the business.

Headquartered in Birmingham, Linpac reported revenues of £1.2bn for the year ended December 2002.

Montagu will be working closely with the current Linpac management team. Michael Cornish, chairman, will remain on the board as a non-executive director and David Williams, currently group managing director, will become executive chairman.

Mark Tentori, finance director and Bob Lang also remain on the Board. Phil Goodwin and James Roddis from Montagu Private Equity will join the board as non-executive directors.