South African cement maker bid with Fairfax has no firm rival
Merger of PPC, AfriSam to be well placed for Africa growth
AfriSam Group Pty Ltd. Chief Executive Officer Rob Wessels said the South African cement maker will decide whether to make a higher offer for larger rival PPC Ltd. only in the event of a formal approach from a competing bidder.
“We may or may not re-look at our bid, depending on if and what someone else puts on the table,” the executive said by phone on Wednesday. In the absence of a binding counter proposal, PPC shareholders should consider the benefits of AfriSam’s offer, which is backed by Canada’s Fairfax Financial Holdings Ltd., he said.
The CEO’s comments come less than a week after Johannesburg-based PPC said it expects Fairfax and AfriSam to come back with a better offer. Its current bid of 5.75 rand a share for 2 billion rand ($151 million) of stock undervalues cash flow to come from new projects around sub-Saharan Africa, PPC said in a presentation to investors on Friday. Dangote Cement Plc, controlled by Nigeria’s richest man, Aliko Dangote, has made an indicative proposal.
The Fairfax offer allows PPC shareholders to participate in the growth potential of a combination with AfriSam, which would be better placed to expand in the continent, Wessels said. The 5.75 rand-a-share cash component would rise to as much as 9.50 rand when operation savings and other factors are taken into account, he said.
PPC shares declined 2.1 percent to 6.22 rand as of the close in Johannesburg, valuing the company at 9.9 billion rand.