Dangote joins in PPC shares bidding war
A THIRD party has joined the bid for the country’s cement giant PPC linking AfriSam and Canada’s Fairfax Financial Holdings.
Dangote Cement, owned by Africa’s richest man Aliko Dangote, may go into a bidding war with the two other bidders for a potential pan-African combination with PPC.
Dangote has an interest in acquiring the entire share capital of PPC and is currently in the preliminary stage communication with PPC.
Fairfax Africa Investments also wants to acquire shares in PPC to the value of R2bn, offering R5.75 per ordinary share of PPC. Fairfax is a subsidiary of Fairfax Africa Holdings Corporation, which is an investment holding company listed on the Toronto Stock Exchange. The company has a market cap of over $600m (R8bn) and about $400m of investable cash.
Fairfax Africa’s controlling shareholder, Fairfax Financial Holdings, which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.
One of the conditions precedent to its partial offer becoming effective is that shareholders of PPC approve a proposal to give effect to a merger between PPC and AfriSam.
PPC’s board recently said that although they have not had sufficient time to mull over the offer, based on the prior extensive engagement in respect of a possible merger with AfriSam, it noted that the offer price of R5.75 per ordinary share fundamentally “undervalues” PPC and, when considered in conjunction with the proposed exchange ratio, does not constitute sufficient compensation for PPC’s shareholders.
The Public Investment Corporation owns about 11% of PPC as the biggest shareholder of AfriSam with a 60% stake. Experts say that the largest shareholder is in full support of the joint offer between AfriSam, Fairfax and PPC to create an unstoppable supplier.
FILLABLE : A worker arranges cement bags on a conveyor belt at PPC, which has three companies bidding for it.