Trinidad Cement Ltd (TCL), recently acquired by Mexican cement giant Cemex via its subsidiary Sierra Trading, has announced an all-cash takeover bid for Readymix (West Indies) Ltd.
According to the offer circular sent to shareholders, TCL will pay TTD11 or US$1.62/share to acquire the outstanding shares that it does not already hold in Readymix. TCL currently owns 71.1 per cent of Readymix’s issued share capital or 8,531,977 shares of the company. The remaining 28.9 per cent of shares are owned by a number of institutional and individual shareholders, with Republic Bank being the single largest shareholder owning 12.93 per cent.
At a per share price of TT$11, TCL would need to spend TTD38,148, 253 to acquire all of the Readymix shares it does not already own.
According to the circular, Readymix’s performance in recent years has been hampered by a number of factors, particularly a decline in construction activity in T&T and increased competition in the domestic market.
"Within recent years Readymix has seen a decline in financial performance with falling sales as a result of a marked slow-down in the local construction industry over the past three years and more so towards the end of 2015 as well as increased competition from a number of new entrants into the Trinidad and Tobago market, all of which have resulted in depressed prices of concrete and aggregate and lower profitability. The company is further burdened by the reporting requirements and associated costs of continuing to be a publicly-traded company listed on the TTSE and registered as a reporting issuer with the TTSEC," according to the circular said.
Commenting on the motivation behind the offer, the circular said: "Despite the financial and operational challenges faced, Readymix, as part of the TCL Group, provides an avenue for the vertical integration of the production of cement and eventual sale and distribution of premixed concrete."
