Mar 2017 Financial News

TCL makes takeover bid for Readymix

Mar 28, 2017

Trinidad Cement Limited (TCL), recently acquired by Mexican cement giant Cemex, has announced an all-cash takeover bid for Readymix (West Indies) Limited.

According to the offer circular sent to shareholders yesterday, TCL will pay TT$11 or US$1.62 per share to acquire the outstanding shares that it does not already hold in Readymix. TCL currently owns 71.1 per cent of Readymix’s issued share capital or 8,531,977 shares of the company. The remaining 28.9 per cent of shares are owned by a number of institutional and individual shareholders, with Republic Bank being the single largest shareholder owning 12.93 per cent.

At a per share price of $11, TCL would need to spend $38,148, 253 to acquire all of the Readymix shares it does not already own.

Readymix, a publicly traded company on the T&T Stock Exchange, specialises in the production of concrete, aggregate and pitrun and also own a number of quarries in Trinidad.

According to the circular, Readymix’s performance in recent years has been hampered by a number of factors, particularly a decline in construction activity in T&T and increased competition in the d0mestic market.

“Within recent years Readymix has seen a decline in financial performance with falling sales as a result of a marked slow-down in the local construction industry over the past three years and more so towards the end of 2015 as well as increased competition from a number of new entrants into the Trinidad and Tobago market, all of which have resulted in depressed prices of concrete and aggregate and lower profitability. The company is further burdened by the reporting requirements and associated costs of continuing to be a publicly traded company listed on the TTSE and registered as a reporting issuer with the TTSEC,” according to the circular said.

The circular also added that Readymix has not paid a dividend to its shareholders within the last seven years, and has experienced a steady fall in its share price over the last five years, moving from $31.35 to $10.80 at present.

The offer represents a 1.9 per cent premium over the closing share price ($10.80) of Readymix as at the close of trading last Friday.

Commenting on the motivation behind the offer, the circular said: “Despite the financial and operational challenges faced, Readymix, as part of the TCL Group, provides an avenue for the vertical integration of the production of cement and eventual sale and distribution of premixed concrete. With this in mind, the offeror thought it fit to seek to acquire the remaining ordinary shares not already owned, thus providing the minority shareholders with an opportunity to realise their investment in Readymix with the eventual goal of applying to the TTSE and TTSEC to have the Company de-listed and de-registered as a reporting issuer respectively.”

The offer period expires at 4 pm on May 1, 2017.

Source:
Trinidad Guardian
Tuesday March 28, 2017

http://www.guardian.co.tt/business/2017-03-28/tcl-makes-takeover-bid-readymix