Boral cleared the first hurdle in its bid to acquire Adelaide Brighton yesterday after winning over the cement and lime producer's independent directors, sweetening its takeover offer by A$27 million to A$867m. Speculation that AdBri would reject Boral's three-week-old, $840m bid with a possible earnings upgrade or even news of a rival bid faded late yesterday after AdBri said the lift in the offer from $1.55 to $1.60 a share was a "good result" for shareholders. Before trading was halted, AdBri shares rose 1c to A$1.49 and just before the announcement there were still suggestions the bid could turn nasty as Boral shares closed 10c lower at A$5.04. But to no avail. Mr Chellew said: "I think most of the shareholders will be happy with what we've achieved. "Industry consolidation is happening across the world . . . I think there's an inevitability that big companies become bigger because of economies of scale." Yet with Boral set to gain a near monopoly in the Victorian cement and Australian masonry markets, analysts say it is likely some elements of the deal will be blocked by the Australian Competition and Consumer Commission.
Boral has already conceded it will have to dispose of AdBri's masonry interests, Rocla and C&M Brick, and AdBri's 50 per cent stake in the Victorian Independent Cement & Lime business, which is co-owned with AdBri's second-largest shareholder, Barro Holdings, which itself could be another stumbling block in the takeover. With Barro holding 9.84 per cent of AdBri, Boral said the deal was conditional on it taking 90 per cent of the shares in the company. It is doubtful that AdBri's largest shareholder, London-listed RMC, will oppose the bid, given it sold it first 20 per cent stake in the company to Boral at $1.55 a share; and a second 20 per cent parcel to institutional investors at $1.40 a share, forgoing $16 million to register the sale before December 31. RMC still holds 15 per cent of AdBri.