PPC turns down Fairfax offer
The board says the investment company’s proposal of R5.75 a share in AfriSam deal undervalues the cement maker
PPC has rejected a partial offer by the African arm of Canadian insurer Fairfax Financial Holdings to buy R2bn of ordinary shares in SA’s biggest cement maker for R5.75 a share. PPC and at least 25% of the group’s shareholders had earlier rejected a joint conditional partial offer from unlisted South African cement producer AfriSam and Fairfax Africa Investments, saying it significantly undervalued PPC. The offer was conditional on a merger between PPC and AfriSam, subject to a R4bn recapitalisation of AfriSam before any merger. The parties had said PPC was worth between R8 and far more than R10 per share, if a control premium was added. The proposed merger ratio was based on a share exchange of 58 PPC shares for 42 AfriSam shares, valuing PPC at a 62% premium based on pro forma earnings multiples of the two businesses, according to AfriSam. “The independent board advises shareholders that … it has resolved not to recommend to shareholders that they accept the partial offer,” PPC sa...
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