Ireland’s CRH has registered its interest in submitting a cash bid for South African cement producer PPC as it takes on AfriSam and LafargeHolcim.
While PPC did not disclose the amount of the bid, it said it would give the Irish group time for due diligence and to submit an updated bid next week which would include a value per share for the company.
"Historically, it would have been unusual for CRH to enter a bidding situation for a listed company, given management's preference for purchasing unlisted businesses at lower valuation multiples," said David Holohan, chief investment officer with Merrion Capital in Dublin. "However, PPC is South Africa's largest cement maker, providing a rare opportunity to acquire a market-leading player, justifying CRH's expression of interest and possibly competing against industry heavyweight LafargeHolcim and Fairfax Financial."
PPC also said in a note to the Johannesburg Stock Exchange that “the Fairfax Partial Offer, announced by PPC on SENS on 4 September 2017, is still proceeding in accordance with the Independent Board process described in the announcement published by PPC on SENS on 3 October 2017, concurrently with the engagements with LafargeHolcim and CRH. It should be noted that the engagements with LafargeHolcim and CRH may or may not lead to the submission of firm intention letters”.
Shares in PPC, which has a market capitalisation of ZAR10.12bn (U$704m) and had a ZAR4.7bn net debt at the end of March, fell 2.8 per cent at ZAR6.51 by 12.43h GMT, while CRH’s stock was down 1.8 per cent at EUR30.03, reports Reuters.
