Boral marks time for AdBri

Boral marks time for AdBri
31 March 2004

Boral is expected to extend its A$1 billion-plus takeover offer for cement maker Adelaide Brighton by another month to close probably by early May.  This is because the competition watchdog, the Australian Competition and Consumer Commission (ACCC), is still seeking additional information from both parties before giving the green light to the merger.  "This is a fairly major merger and we have to make sure that our investigations are thorough before making our decision," an ACCC spokeswoman said yesterday.

Since the takeover is subject to ACCC approval, it is likely that the watchdog committee may require Boral to divest some of AdBri’s assets, including its 50 per cent joint venture with David Barro in Independent Cement & Lime (ICL) if the takeover is successful.  According to Boral, submissions were made to the ACCC shortly after Christmas. When Boral increased its offer from $1.55 to $1.60 a share two months ago, AdBri’s independent directors recommended that shareholders accept the increased offer.

David Barro, who has a 10.1 per cent holding in AdBri, is the only major shareholder who has not indicated whether he would use his stake to block Boral’s bid.  While Boral has continued to negotiate with Mr Barro, the company said it "has not had any response from him".  AdBri managing director Mark Chellew said: "The Barro family does not have to make any decision until the ACCC makes a decision. I would  be surprised if Boral does  not extend its offer again."

Last month, AdBri delivered a record full-year net profit of $57.7 million, up 14 per cent. But it warned that sales volumes might flatten this year because of a slowing residential market.  In the same month, Boral raised its full-year profit forecast to about $340 million -- 20 per cent above last year’s $283 million.

Published under Cement News