NEWS ANALYSIS: PPC’s valuation threatens a battle royal in any merger bids
Competition hurdles will also probably strongly affect any valuation
The valuation of PPC will turn into a battle royal before any deal can be made with the company. This will keep the share price of SA’s biggest cement producer on the boil, as it has been since the global financial crisis smacked it for a six from 2008 onwards, with the share losing 10 times its value in ensuing years. It plunged from above R50 per share then to between R3.50 and R7.50 in recent months. A R4bn rights issue to cover debt has heavily diluted the company, along with ongoing empowerment transactions. But PPC is rolling out new and upgraded plants in Rwanda, Zimbabwe, the Democratic Republic of Congo and Ethiopia that will soon bring in new revenues. Unlisted, empowered South African cement producer AfriSam, majority owned by the Pubic Investment Corporation (PIC), started the ball rolling more than two-and-a-half years ago by suggesting that the two companies get together to create an African cement titan. It later terminated talks about a potential merger. AfriSam has ...
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