Boral Ltd yesterday offered A$840 million for Adelaide Brighton Ltd, sending its shares soaring by 35 per cent. Boral is offering A$1.55 per share for cement and lime producer Adelaide Brighton, with the offer subject to approval by the Australian Competition and Consumer Commission (ACCC) and a 90 per cent acceptance condition. The bid is at a 36 per cent premium to Adelaide Brighton's closing price on Monday of A$1.14. Shares in Adelaide Brighton rocketed up to the bid price after the announcement of Boral's offer. Boral, which has arranged extra debt facilities to fund the purchase, has a 19.9 per cent stake in Adelaide Brighton after yesterday acquiring 107.8 million of its shares from major shareholder RMC Group Plc.
If Boral is successful it will significantly expand its business and give it full control of Queensland's Sunstate Cement in which it has a half stake with Adelaide Brighton. Boral said the proposed acquisition would expand its geographic market across Australia and enhance its ability to compete effectively in Australian cement markets with Asian suppliers. Adelaide Brighton also owns 50 per cent of Independent Cement and Lime, which buys cement from it and distributes cement in Victoria and NSW. Broker Intersuisse said yesterday that, while there might be ACCC hurdles, Boral looked well placed to complete the takeover. Its 19.9 per cent stake in Adelaide Brighton and "strong synergies" put Boral ahead of any potential competitors.