CRH now has competition in its attempt to takeover US cement maker, Ash Grove Cement. In a statement, the Kansas-based Ash Grove said it had received a second higher bid of US$3.7 billion to US$3.8 billion. CRH had originally offered US$3.5 billion.
“The board of directors of Ash Grove has determined that such proposal could reasonably be expected to result in a superior proposal and has determined to engage with such third party regarding its proposal,” Ash Grove said in a statement.
The identity of the rival bidder was not disclosed.
“There can be no assurance that such competing proposal will lead to a definitive offer or, if such an offer is made, that the board of directors will determine that such offer is superior to the transaction with CRH,” Ash Grove continued.
The emergence of a rival bid is “perhaps not surprising given Ash Grove’s attractive position in the US cement market,” Robert Gardiner of Davy Research said in a note.
Ash Grove is the largest independent US cement manufacturer, with installed capacity of 8.2 million t at eight cement plants. It also operates ready-mixed concrete plants, sand and gravel plants, and limestone quarries.
“Ash Grove now has 15 days to evaluate the new proposal, the outcome of which will determine CRH’s response,” continued Gardiner.
“CRH’s options are now threefold: pursue its original proposal if Ash Grove continues to see it as a superior bid (there is no indication the new bid is a better proposal); match or better the new proposal, which the group clearly has the financial firepower to do; or walk away if the value is not there for shareholders.”
Read the article online at: https://www.worldcement.com/the-americas/06102017/rival-bid-emerges-for-ash-grove-cement/