Readymix soars on takeover hope

READYMIX’s share price shot up by over 500% yesterday on the back of it entering talks which could lead to the takeover of the company.

The share price went up by 16c — from 3c to 19c — after the troubled Dublin-based cement product and building materials provider told the stock exchange it had received another takeover approach.

A company called Readymix Investments — a wholly-owned indirect subsidiary of Cemex Espana (the Spanish arm of international cement giant, Cemex) — has approached the Dublin company, indicating that it would be prepared to offer 22c per share in a cash deal. Although quoted on the ISEQ, Readymix (Ireland) is 60% owned by Mexican-based group Cemex.

While the approach has been made, Readymix (Ireland) stressed that no formal offer has been forthcoming, as yet, and — as a result — the approach is only preliminary in nature, at this time. The company added that “there can be no certainty that an offer will be made”.

Readymix’s Irish management said that the company has formally commenced discussions with its suitor, stating: “The directors of the company announce that they have received an approach from Readymix Investments, a wholly owned indirect subsidiary of Cemex España, S.A outlining the terms of a possible offer which it may be prepared to make for all the shares of the company, other than shares currently owned by it or another member of the Cemex group.”

This is the second time in over a year that Readymix has been approached in this manner.

Last March it said that the potential sale of the business was unlikely to materialise on the back of talks with an interested party being terminated, after an initial offer had been received the previous October.

Readymix also said yesterday that it is set to “shortly” publish a trading update for 2011. That is unlikely to make pleasant reading for shareholders. Last October Readymix said that its annual losses had nearly trebled by September, prompted by a third quarter year-on-year fall of 6.5% in revenues.

In the run-up to Christmas, Readymix sold a number of assets in Tipperary and Kildare, but said that the deals would not have a significant impact on the company’s overall cash position.