A shareholder revolt against an attempted buyout of Lafarge North America Inc. (LAF) continues despite an enriched offer Lafarge SA made for the company on Tuesday. A pension fund that has been fighting the buyout said it is happy to see a new, higher bid, but still thinks the offer is too low.
Lafarge SA on Tuesday bowed to pressure from increasingly vocal minority shareholders and raised its bid for Lafarge North America by 9.3 per cent in a move to win full control of North America’s largest cement supplier. Lafarge, which reiterated last month its view that its US$75 a share offer was "full and fair," said Tuesday said it will now offer US$82 a share and extend the offer until April 28.
"We’re glad they’ve finally come off the obvious low-ball offer but we still think it’s too low," said Richard Metcalf, who represents the New Jersey Building Laborers Statewide Benefit Funds. "The people we have talked to so far have had the same reaction. I certainly see no movement toward tendering of shares at this time.
The New Jersey Building Laborers Statewide Benefit Funds joined over the months with the International Brotherhood of Teamsters General Fund to oppose the Lafarge offers. In March, Toronto investment house Mackenzie Financial Corp. also threw its weight behind the two union pension funds, and the angry shareholders unveiled a Web site aimed at bolstering the revolt. It wasn’t immediately clear how the Teamsters fund and Mackenzie are weighing in on the new bid.
Metcalf said New Jersey fund will spend the next few days meeting with other shareholders and studying the new offer. It is concerned that the share price of a number of Lafarge competitors has climbed during the period since the initial offer was made. "We’ve been called by a number of other long- term holders who believe that high US$80s to low US$90s is probably a better close estimate," said Metcalf.