Readymix considers takeover approach

Directors of Readymix areconsidering a takeover approach from majority shareholder Cemex, which would most likely see the Irish cement producer leave the Irish Stock Exchange.

Already owner of 60% of Readymix’s stock, Spanish-based Cemex has upped its offer from 22c to 25c per share in cash, an increase of 13.6% from its January offer. Readymix has described the terms as fair and reasonable.

In line with Irish takeover rules, in January the Readymix board created an independent board consisting of Adrian Auer and Donal O’Connor to consider the approach and determine the company’s response.

In consultation with its advisers, this committee has considered the merits of this increased possible offer and informed Cemex that, if announced, it would recommend that Readymix shareholders accept the offer.

The committee said it views the offer as being favourable to its minority shareholders, given the prevailing economic circumstances and the highly uncertain outlook for the housing and construction sectors, the probability of continuing operating losses, and the consequent progressive erosion in value of the company’s assets.

The committee also considered the sustainability of the company’s liability under the €35m debt facility provided by the majority shareholder, which is due for repayment in September 2014, as well as the absence of any offers to acquire the company or major parts of its assets from third parties on acceptable terms, though Readymix was in a formal takeover offer period for six months during 2010 and 2011.

Any move by Cemex to make a formal offer is now subject to a number of pre-conditions, particularly the support of major Cemex shareholders.