Irish cement giant CRH says it will not submit an updated expression of interest for an all-cash proposal to buy a controlling stake in PPC, leaving a value per share offer for SA’s largest cement producer up in the air.

This comes after PPC recently rejected a conditional partial offer from unlisted South African cement maker AfriSam and Fairfax Africa Investments — an arm of Canadian insurer Fairfax Financial Holdings — that valued R2bn of PPC ordinary shares at R5.75 a share.

CRH, a Dublin-based building materials company listed on the London, Dublin and New York stock exchanges is the second potential bidder for some or all of PPC’s assets to withdraw from bidding procedures. Nigeria’s Dangote cement group in October 2017 withdrew its non-binding communication of interest for buying up all of PPC.

This means only one potential bidder is left — European cement titan LafargeHolcim.

The spate of interest has caused PPC’s share price to gyrate wildly between R3.50 and above R7.50 in the past four months. On Thursday it fell as much as 4.64% in late afternoon trade, before pulling back to being 3.05% down at R6.69 before the close.

PPC has 11 factories in SA, Botswana, the Democratic Republic of the Congo, Ethiopia, Rwanda and Zimbabwe.

No due diligence had been done by Dangote, while CRH had conducted an initial due diligence, PPC said.

“Please note that there were no reasons given by CRH or Dangote — they both withdrew on their own accord,” Anashrin Pillay, PPC group manager of investor relations said on Thursday. “In the case of CRH, they were very complimentary about the operations and the management of PPC in their response letter, with no specifics given as to the reasons for their withdrawal,” he said.

“PPC remains an attractive investment and was trading well below its intrinsic value, hence the initial opportunity seen by the cement majors. The improved financial position of PPC and the very strong financial performance [in the six months to September 2017] have reconfirmed the long-term value of the company.... PPC will announce developments only as required,” Pillay said.

A nonbinding expression of interest from LafargeHolcim remains in play. PPC’s independent board had laid out a framework for considering bids and expected finalisation after December 12 2017.

“I would’ve thought [CRH would] at least make some sort of offer, especially considering the relatively low [Afrisam-Fairfax] offer,” said Mish-al Emeran, analyst at Electus Fund Managers. PPC had quality assets and its progress with developing its rest-of-Africa assets amid declining capital expenditure boded well.



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