South African mining group Anglo American has been revealed as the mystery UK 1.1 billion bidder for newly demerged British building materials firm Tarmac.
According to a recent report, Anglo America…
South African mining group Anglo American has been revealed as the mystery UK 1.1 billion bidder for newly demerged British building materials firm Tarmac. According to a recent report, Anglo American was looking to boost the UK aggregates business it inherited when it merged with its Luxembourg-listed sister company, Minorco, and chose to make its primary listing on the London Stock Exchange earlier this year. Tarmac said it had rejected a UK 5.35-per-share offer worth about UK 1.1 billion, but refused to disclose the identity of the bidder. A successful offer would make the mining group one of the world“s largest building materials firms. SA Anglo American investor relations manager Ann Dunn said the news about the transaction was based on pure speculation, and declined to comment. “Normally when we make a deal of either an acquisition or transaction as big as that, an announcement will follow, but this one is speculation,” she said. Tarmac also refused to comment. Tarmac CE, Roy Harrison, said his rejection of the offer was backed by Tarmac“s main shareholders and he looked forward to getting back to running the company. However, the disclosure that Anglo American is the bidder will likely appeal to Tarmac shareholders for a higher offer for their shares, which have fallen by as much as 35% since the end of July. Anglo American has identified aggregates as one of its core businesses and its finance director Tony Lea said in early September the group had the financial firepower to undertake a major acquisition running into the “billions”. Anglo has an existing industrial minerals business which had a turnover of US$ 1,073 billion last year, while operating profit was US$ 95 million. Anglo“s minerals interests are made up mainly of construction materials and soda ash mining based in the UK, Spain, Brazil, Botswana and Zimbabwe. The latest bid comes only three months after Tarmac shed its construction arm, now called Carillion plc. The demerger was an idea generated out of merger talks with UK aggregates rival, Aggregate Industries. Aggregate abandoned the merger talks with Tarmac mainly because of concerns over the liabilities of the construction arm. Tarmac“s shares had fallen steadily since the company demerged from its construction services and relisted at 545p on 30 July. Tarmac shares hit a record low of about 352p at the beginning of November, and they closed recently at 512p, 33p or nearly 7% higher, after the bid became known. Tarmac“s UK division contributes 70% of total earnings, with turnover amounting to UK 662.8 million last year. Tarmac now has net debt of about UK 455 million.