Even as Texas Industries Inc. maintains its silence regarding buyout talks instigated by a major shareholder, insiders are selling company shares, suggesting a deal isn’t on the horizon.
Egyptian investor Nassef Sawiris disclosed last month that he had accumulated a 2.3% stake in the Dallas-based cement producer and controlled options that, if exercised, would boost the stake to 9.1%. Mr. Sawiris said he may push for the company to be sold and may attempt to seek control of the company himself "through a negotiated transaction or otherwise."
Texas Industries hasn’t commented publicly on Mr. Sawiris’s filing to the Securities and Exchange Commission, and a company representative didn’t return calls seeking comment.
But recent stock sales by Chairman Robert D. Rogers and two company vice presidents suggest the insiders don’t expect the company to be sold for a premium price any time soon, said Ben Silverman, director of research for InsiderScore.com.
Mr. Silverman said the insiders’ sales imply two things: "One, that Texas Industries does not have an interest in being acquired, and two, that even if they do, the premium for that acquisition wouldn’t be much."
Texas Industries shares jumped 11% to close at $61 on Oct. 19, the day of NNS Holding’s filing. NNS Holding is a diversified industrial and financial investment holding company run by Mr. Sawiris, who is also the chief executive of Orascom Construction Industries Co., a cement producer and construction contractor in Egypt.
The three Texas Industries insiders reported selling a total of 67,563 shares between Oct. 31 and Friday for an average price of $62.18 a share. Texas Industries shares traded at $61.98 in 4 p.m. New York Stock Exchange composite trading.
Mr. Sawiris said in the October filing that he had been communicating with Texas Industries and expected to stay in touch with the company’s board and management.
Mr. Silverman, however, said he is skeptical that any talks are the precursor to a deal, at least in the near term, because insiders are prohibited from using nonpublic information to make trading decisions. "If there was [an ongoing discussion], Rogers, the chairman, would be in possession of significant material information, which would prohibit him from being able to sell at this point," Mr. Silverman said.
The stock sales, however, do show that the insiders are probably not counting on an acquisition with a large premium, because otherwise they would have held onto the shares, Mr. Silverman said.
The day before Mr. Sawiris’s filing, Texas Industries announced its board approved renewal of its poison pill, which is designed to force a potential buyer to work through the company’s board to make a deal.