AfriSam shows interest in rival PPC

2014-12-10 15:05

Three days after former PPC boss Ketso Gordhan was quoted as saying it would make a great takeover target, the cement producer has announced it has received a merger proposal from a rival.

Today, PPC issued a cautionary announcement saying it was considering the proposal from the AfriSam group, led by Stephan Olivier. AfriSam plays in the same sector as PPC, providing cement and readymix products, among other products.

AfriSam spokesperson Maxine Nel declined to comment.

Recently, former MTN CEO Phuthuma Nhleko’s Pembani group acquired a 38% stake in AfriSam during a debt restructuring exercise from the Public Investment Corporation (PIC), which left the asset manager with 57%.

The PIC is also a large shareholder in PPC, and the Competition Tribunal has blocked it from having any board representatives in companies other than AfriSam.

The AfriSam proposal was conditional and non-binding, according to PPC.

“The Board is considering the indicative proposal and will make a further announcement in due course once it has concluded its consideration of the indicative proposal.”

Gordhan said given the right valuation, the merger will be a good deal for PPC.

By 2:35pm, about an hour after the cautionary, the PPC share had risen 4.17% to R25.

Meanwhile, the PIC welcomed news of the proposed tie-up.

“We think a potential merger between PPC and Afrisam would create a formidable cement player on the continent that will contribute meaningfully to South Africa and the continent’s developmental plans,” said Fidelis Madavo, its acting Chief Investment Officer.

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