The Barlo plastics group received unanimous shareholder support for its #55.8 million (£43.95 million) acquisition of Athlone Extrusions at an extraordinary general meeting yesterday.

Shareholders heard the offer had been extended until Friday, January 19th to allow all the Athlone shareholders vote on the proposed takeover. Barlo said it had acquired or received valid acceptances in respect of 88.31 per cent of the issued ordinary share capital of Athlone.

Barlo is offering Athlone shareholders #1.20 a share, slightly more than the #1.16 price at which it was floated on the Dublin and London stock exchanges three years ago.

Mr Brian Beausang, corporate development director at Barlo, said the price represented value for Barlo.

"We've been allowed take a bit of advantage from the discount on small company multiples on the stock market," said Mr Beausang. "This deal is value if one looks at the multiples compared to recent privatisations on the Irish market and also the last significant transaction in this industry when British Vita purchased Doeflex. That deal would have been done at significantly higher multiples than the Barlo/ Athlone one."

Barlo would buy Athlone on a multiple of 10 times earnings compared to 15.6 times earnings British Vita paid for Doeflex, Mr Beausang said.

He said the deal was a logical move, offering geographical and product synergies. Barlo produced transparent plastic sheeting, while Athlone manufactured coloured sheets.

"We have an extensive network on the continent, while Athlone has traded predominantly in the British Isles. The real synergy that comes from this transaction is Barlo's European distribution network will be available to Athlone," he said. With the European plastics industry in a consolidation phase, Mr Beausang said Barlo would continue making acquisitions and growing organically.

"We've always had a good mix of organic and acquisitions growth. The fact that we can put together a number of individual companies into one business allows them to grow quicker organically than if they were all separate because you get better management, better R&D and better technical support," he said.