Dan­gote joins in PPC shares bid­ding war

The New Age (Western Cape) - - Business - THELMA NGOMA thel­man@the­newage.co.za

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.

PIC­TURE: GETTY IM­AGES

FILLABLE : A worker ar­ranges ce­ment bags on a con­veyor belt at PPC, which has three com­pa­nies bid­ding for it.

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