CEMEX HAS increased its €9.5 million bid for Irish building materials group Readymix by more than 13 per cent, after discussions with an independent committee set up to assess the offer.
Cemex, which already owns 60 per cent of the Irish business, made the “possible offer” to buy the remaining 40 per cent of Readymix shares that it does not own last month through a Spanish subsidiary. The Mexican-based multi-national has increased the possible offer, which was originally for 22 cent a share for the remaining, to 25 cent.
This values the outstanding shares in Readymix at close to €10.8 million and implies that the entire business is worth €27 million.
The committee, which comprises Readymix chairman Adrian Auer and independent director Donal O’Connor, said that it considered the revised offer to be one that was “fair and reasonable”.
A statement yesterday added that the committee has told Cemex that it would recommend the offer to shareholders if it is formally announced.
The committee said that it had to consider the sustainability of the company’s “increasing liability” for a €35 million loan, given to it by Cemex – this is due to be repaid in 2014 – and the lack of any other offers for the company or its assets.
Along with this, the committee also assessed the options available to Readymix to deliver value to its shareholders.
This assessment was done against the backdrop an uncertain market for housing and construction.
The company’s operations are likely to continue losing money and its assets are also likely to fall in value.
“The independent committee has also taken into account the diminishing options available to Readymix for further cost reductions and operating efficiencies, recognising the extensive range of actions already taken by the management of the company over the last four years,” the statement said.
Taking these factors into account, the committee said that it had concluded that the 25 cent-a-share offer would be in the best interests of shareholders if Cemex were to make a firm committment to pay that sum.
Readymix last week estimated that it lost €54 million in 2011.
