Bids up to €400m for CRH units

FINAL bids of up to €400 million for at least one of the two non-core assets up for sale at CRH are understood to have been lodged yesterday.

The Dublin-headquartered international building materials and cement products giant announced earlier in the year that it was intending to sell off its European insulation and climate control businesses given that it no longer had an interest in becoming a leading player in either market segment.

It is thought CRH could fetch a combined figure of between €300m and €400m for the assets. It is also understood that yesterday was the final deadline for bids for the insulation business; although the group was making no comment on account of it being in a closed period ahead of the publication of its half-year results next Tuesday.

A CRH spokesperson said that management was likely to update on progress being made on the disposals at the formal presentation of its results early next week.

While the sale process for the insulation business seems to be in full flow, the information memorandum concerning the climate control division isn’t expected to be circulated amongst potential interested parties until the turn of the month.

CRH is one of around 10 high profile Irish publicly quoted companies due to issue first half figures during the week. Analysts are anticipating a year-on-year fall of around 20% in group EBITDA (earnings before interest, tax, depreciation and amortisation) but a break-even on the pre-tax profit side of things. Net debt is expected to be nearly €1bn higher than at the end of 2009, mainly due to higher working capital and the non-beneficial $/€ exchange rate, resulting in a hit of around €500m.

In a pre-results research note Barry Dixon of Davy Stockbrokers said: “Excluding the impact of restructuring charges and currencies, we estimate first half EBITDA is down by almost 30%. The rate of deterioration has improved through the quarter following the severely weather-impacted first quarter.”

“In its outlook statement in July, management indicated that although recent macro economic data has increased uncertainty, it still expected second half EBITDA to be ahead of the same period last year. Our full-year EBITDA forecast of €1.88bn represents 5% growth,” he added.