Dan­gote makes over­ture to PPC

Business Day - - FRONT PAGE - Mark Al­lix In­dus­trial Writer al­lixm@bdfm.co.za

PPC says it has re­ceived a non­bind­ing “com­mu­ni­ca­tion of in­ter­est” from Nige­rian com­pany Dan­gote Ce­ment to buy the en­tire share cap­i­tal of the com­pany.

PPC said on Thurs­day it had re­ceived a non­bind­ing “com­mu­ni­ca­tion of in­ter­est” from Nige­rian com­pany Dan­gote Ce­ment to buy the en­tire share cap­i­tal of the com­pany.

PPC’s share price jumped as much as 5.7% in af­ter­noon trade on Thurs­day.

This comes af­ter PPC’s board ear­lier ad­vised of in­dica­tive pro­pos­als from two other bid­ders, each in re­la­tion to a po­ten­tial pan-African com­bi­na­tion with SA’s largest ce­ment pro­ducer.

Ear­lier in Septem­ber, South African ce­ment pro­ducer AfriSam sub­mit­ted a re­vised merger pro­posal to PPC in tan­dem with an un­der­tak­ing by Canada’s Fair­fax Africa In­vest­ments to buy R2bn in or­di­nary shares at R5.75 a share.

AfriSam and PPC had pre­vi­ously said they were look­ing to cre­ate a merged ce­ment pro­ducer that could com­pete in the rest of Africa.

AfriSam had been af­firmed as the bid­der in any merger. Mish-al Emeran‚ an eq­uity an­a­lyst at Elec­tus Fund Man­agers‚ said there would be sev­eral hur­dles to a sale or merger, in­clud­ing com­pe­ti­tion is­sues.

“I think this will take some time to play out. I think given that PPC is trad­ing well be­low its re­place­ment value, one can un­der­stand why there is in­ter­est from a few play­ers,” he said.

“One of PPC’s ear­lier an­nounce­ments in­di­cated that two other trade bid­ders with a ‘pan-African’ pres­ence were in­ter­ested, so I think that lim­its it to a few. ARM Ce­ment [Kenya] and Hei­del­berg are two names, be­sides Dan­gote Ce­ment, that spring to mind,” he said.

Me­dia re­ports also stated that Europe’s La­fargeHol­cim was also in­ter­ested.

PPC said the com­pany’s in­de­pen­dent board was con­sid­er­ing Dan­gote’s of­fer. PPC’s board ear­lier rec­om­mended that el­i­gi­ble share­hold­ers should ac­cept the re­vised of­fer by AfriSam and Fair­fax.

PPC group man­ager of cor­po­rate af­fairs Siob­han Mc­Carthy said fur­ther de­tails re­mained con­fi­den­tial at this stage.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.