Australian cement bid ends up in court

Australian cement bid ends up in court
Published: 08 June 2004

The Australian Competition and Consumer Commission is seeking an injunction in the Federal Court to prevent Boral from taking any steps to acquire or exercise substantial influence over Adelaide Brighton.  The Melbourne court has fixed a deadline of the 6th of August for the filing of claims and defence as well as industry evidence.  The hearing of the competition case is expected to take place during the final quarter of 2004.  In the interim, Boral has given a number of undertakings, notably not to acquire any further shares in Adelaide Brighton and not to exercise voting rights in Adelaide Brighton other than in respect of the 19.9% stake held at the 19th of December last year, before Boral launched its bid for full control of the second largest Australian cement producer. 

The board of Adelaide Brighton, which had earlier recommended Boral’s increased offer of Aus$1.60 per share, has now withdrawn the recommendation and advises shareholders to withdraw their acceptances in view of the lengthy legal proceedings, likely to draw on into 2005 as the Australian competition authorities argue their case against the number of cement producers in the country being allowed to fall from three to two.  The Adelaide Brighton management reports cement demand to date slightly ahead of its expectations and that pricing has been stable and arguably below import parity in some areas.  Although some softening of demand is envisaged during the second half of 2004, cement and lime sales for the full year should be ahead of the volumes achieved in 2003, when the group reported an 8% increase in cement deliveries and a 2% advance in lime volume.