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PPC rejects Fairfax bid

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World Cement,

PPC has rejected a partial bid for the company by Fairfax Africa Investments, a deal that would also have seen the company merge with its rival, Afrisam. The rejection of the Fairfax offer leaves two bidders in the running for control of PPC: multinational building materials suppliers, CRH and LafargeHolcim.

Fairfax had offered ZAR2 billion for a 22% stake in PPC, on the condition that the company combines with Afrisam. The bid had faced significant opposition from some major shareholders in PPC, however, and in the end was deemed insufficient by the independent board convened by PPC to evaluate the offer.

According to a PPC releases to the Johannesburg Stock Exchange, the independent board “is of the opinion that the partial offers, both in the context of the proposed merger, as well as on a stand-alone basis, is not fair and reasonable.”

The rejection of the Fairfax bid follows the withdrawal of Nigeria-based Dangote Cement from the battle for control of PPC in October. It leaves Switzerland-based LafargeHolcim and Ireland’s CRH as the two companies with expressions of interest in acquiring the firm, which is South Africa’s largest cement make.

PPC “is continuing its engagements with CRH and LafargeHolcim regarding their respective non-binding expressions of interest,” the company said. “Shareholders should note that the engagements with CRH and LafargeHolcim may or may not lead to the submission of firm intention letters.”

PPC announced earnings up 4% at ZAR1.2 billion and net profits up 188% to ZAR294 million in the six months to the end of September on the performance of its businesses outside of South Africa.

“The period under review has been transformational for the group with our new investments in Zimbabwe and Rwanda contributing positively to our growth,” PPC CEO Johan Claassen said.

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