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Cemex increases offer for TCL
Mexican cement giant Cemex yesterday increased its offer to Trinidad Cement Limited (TCL) shareholders as it moves to take over control of the local company.
In a media release, Cemex announced that through its indirect subsidiary Sierra Trading, it had increased its takeover offer from $4.50 to $5.07 per share. As part of the amended offer, the company also gave TCL shareholders, with the exception of those in Barbados, the option to be paid in US dollars.
Full acceptance of the amended offer would result in a cash payment by Sierra of approximately $672 million, Cemex said.
The new offer price represents a premium of 50 per cent over the December 1, 2016, closing price of TCL’s shares on the T&T Stock Exchange.
“Among other conditions, the offer, as amended by the amended offer, will be conditional on Sierra acquiring at least an amount of TCL shares that would allow Cemex, for financial reporting purposes, to consolidate TCL,” the company said.
Through Sierra, Cemex is seeking to acquire up to 132,616,942 ordinary shares in TCL which together with Sierra’s current share ownership would result in it holding up to 74.9 per cent of the equity share capital of in the local cement company.
Shareholders have until January 24 at 3 pm to make a decision. Cemex said it does not expect to extend the offer period beyond that date.
Cemex said if the new offer is accepted TCL will continue operating as usual.
“Additionally, TCL will be maintained as a publicly listed company on the Trinidad and Tobago Stock Exchange with the benefit of a strong local shareholding together with the enhanced benefit of proven management and operational expertise from Cemex.”
For the nine months ending September 30, 2016, TCL and its subsidiaries reported revenue of $1 .4 billion and profit after tax of $ 56.9 million.
On December 5, 2016, Cemex initiated attempts to acquire TCL by offering $ 4.50 per share as part of its takeover bid. Through Sierra Trading, an indirect subsidiary, it sought to acquire 132,616,942 shares of in the company to move its shareholding from 39.5 per cent to 74.9 per cent. That offer was rejected by the board of directors on December 23 after a fairness exercise conducted by Ernst and Young Services Limited deemed that the offer was “not fair, from a financial point of view, to shareholders of TCL.”
In 2015, TCL shareholders voted overwhelmingly to lift a 20 per cent cap on shareholding in a move critics said then opened the way for Cemex to take control of the financially struggling company.
The Mexican cement giant is the single largest shareholder in TCL at 39.5 per cent.