Readymix shares down 10 per cent as takeover talks end, Ireland

Readymix shares down 10 per cent as takeover talks end, Ireland
Published: 29 March 2011

Shares in Readymix dropped 10 per cent yesterday after the cement maker confirmed that all talks with potential buyers have ended.

The drop saw shares back to the lowest level since news of a takeover approach was first revealed back in October.

In a statement Readymix confirmed that talks with a number of potential buyers have ended and no offer is likely to be received in the short term.

"No firm and fully financed offer has been received and the board has been informed that no such offer is likely to be received in the short term," according to the statement.

Readymix shares dropped 10pc to 18 cent each on the news, the lowest price since October 12 last year.

Back in October the shares had surged 41pc in a single day’s trading after news of the approach.
Readymix is 60pc owned by Mexican parent Cemex, with the rest of the company traded on the Irish Stock Exchange.

When news of a takeover was first revealed industry sources said Cemex itself was the most likely buyer for the stake in the company it does not already own, but the names of potential buyers have never emerged.

Talks may well have been hurt by a 36pc decline in turnover for the 2010 period that was announced in a trading update for the 12 months to December, back in January.

That update revealed operating losses of €15m and asset impairments of €4.5m.

Yesterday Readymix said trading remains difficult across the Irish operations.

It said cash conservation and cost control are its key priorities.

In a note Bloxham said that closing a successful deal was always going to be difficult for a loss-making business in a fiercely competitive market.

Analysts say, however, that Readymix does offer value to any investor able to ride out what could be a number of difficult years.

Goodbody said Readymix net asset value implies a price of 85c per share.

Even if net assets values fall below 60c per share after another difficult trading year, it remains well over the current share price.