Oct. 31 (Bloomberg) -- Shares of Pilkington Plc surged 26 percent for a value of 2 billion pounds ($3.6 billion) after the U.K. glassmaker said it had received a takeover approach. Possible buyers include Cie. de Saint-Gobain SA of France and Japan's Nippon Sheet Glass Co., analysts said.

The approach from an unidentified party may or may not lead to a bid, Pilkington, the world's No. 2 maker of glass for building, said in a statement today. The St. Helens, England- based company will make a further announcement when appropriate.

``Rumored parties include Nippon Glass or Saint-Gobain,'' said Rachael Waring, an analyst at Numis Securities in Liverpool who said she doubted the logic of a bid. ``The group has seen little top line growth for a number of years, with profit driven by cost savings. This raises the question to us as just how much value an interested party could extract.''

Pilkington issued its statement after the stock earlier gained 13 percent amid speculation that Saint-Gobain might make an offer if it fails in an attempt to buy BPB Plc. The French company, which has so far secured less than 1 percent of BPB stock, said European antitrust laws might make a Pilkington bid ``an impossible transaction.'' It declined to comment further.

Shares of Pilkington, the world's No. 1 maker of auto windshields, supplying glass for cars including Aston Martin's DB9, climbed as much as 32.75 pence to 159.5 pence. They were trading at 150.5 pence as of 12:56 p.m. in London, the third-sharpest gain on the Dow Jones Stoxx 600 Index of leading European companies.

The stock has advanced 36 percent this year. Shares of Saint-Gobain, based near Paris, were today trading 1.4 percent higher for a market value of 15.7 billion euros ($19 billion).

Buyout Contenders

Other bidders for 180-year-old Pilkington may include buyout firms able to borrow money at favorable interest rates, said David Taylor, an analyst at Teather & Greenwood in London.

``Once the focus is on possible financial buyers then the field is open,'' said Taylor, who recommends buying the stock.

Saint-Gobain, the world's biggest glassmaker, said today that BPB investors controlling only 0.7 percent of the plasterboard-company's stock have so far accepted its 3.68 billion-pound bid to create the No. 1 maker of interior walls and ceilings. BPB, based in Slough, England, has said the offer undervalues its business.

Applying the same earnings multiple as Saint-Gobain is offering for BPB would give a prospective price of 200 pence a share for Pilkington, Taylor wrote in a note to investors. For a financial buyer, 180 pence would be more realistic, he said.

Japanese Link

Nippon Sheet Glass, which owns 20 percent of Pilkington, couldn't immediately be reached for comment. The Japanese company said in June that its auto-glass unit plans to maximize cost benefits from the relationship. Nippon Sheet, with a lower market value and sales than Pilkington, may be able to draw on support from one of its main shareholders, Sumitomo Corp.

Pilkington, which invented float-glass manufacturing in the 1950s, ranks No. 2 in the flat-glass market, with 15 percent of global capacity or 19 percent including associates, according to its 2004 annual report. Asahi Glass Co. of Japan ranks largest, Guardian Industries of Auburn Hills, Michigan, is third and Saint-Gobain fourth, the report says.

The U.K. company's revenue is derived roughly equally from the building-glass market and from automakers. It supplied glass for Berlin's new Reichstag building, finished in 1999, as well as the European Court of Human Rights in Strasbourg, France.

Workforce Reduction

Since the mid-1990s, Pilkington has cut its workforce by about one-third to about 24,000. It operates in 24 countries including China, where it has four plants that supply glass for cars built by manufacturers such as Toyota Motor Corp., Asia's biggest automaker, and Volkswagen AG, Europe's biggest.

The annual cost of insuring $10 million of Pilkington debt using credit default swaps rose $23,500 to $80,000 as of 12:15 p.m. in London, according to Deutsche Bank AG prices, suggesting investors now perceive more credit risk in holding the debt.

Publicly traded European companies had this year spent $513.5 billion on acquisitions as of Oct. 28, 55 percent more than in the equivalent period in 2004, according to data compiled by Bloomberg. The value of transactions is the highest since 2000.

To contact the reporter on this story: Brian McGee in London at bmcgee3@bloomberg.net.

Last Updated: October 31, 2005 08:26 EST