CRH bid for Ash Grove Cement hits stumbling block
Building materials group CRH’s bid to acquire Ash Grove Cement for $3.5bn (€2.94bn) has hit a stumbling block after the emergence of an eleventh hour bidder for the Kansas-headquartered company.
Ash Grove has confirmed that it received a competing proposal to acquire the group at an indicated enterprise value of $3.7bn - $3.8bn.
The Board of Ash Grove has determined that the proposal has merit and intends to engage with the third party.
Ash Grove now has 15 days to evaluate the proposal from the third party, the identity of which remains unknown, however Bloomberg are reporting that North American building materials company Summit Materials are the third party.
It should be noted that the third-party approach is a preliminary non-binding proposal, Ash Grove has yet to evaluate it completely.
In addition, there is no indication that the third party proposal is superior to the bid from CRH.
The Board of Ash Grove continues to recommend that stockholders vote in favour of the CRH proposal.
CRH must now await Ash Grove’s evaluation of the new bid before it determines its next step.
For the year ended 31 December 2016, Ash Grove reported profit before tax of US$215m and gross assets of US$2.5bn.
The business, which operates eight cement plants across eight US states, is stock market-listed, but is family controlled.