ON THE MONEY
STUART THEOBALD: PPC shareholders feel relief as share price lifts on interest
Long-suffering PPC shareholders have had a few weeks of cheer. With the cement producer’s share price way off its 2014 levels of more than R30, the company received a formal bid and other indications of interest in September. The action drove the price from R3.75 in August to R6.88 last week. Shareholders are now coming to the view that they deserve more. Such is the ability of an interested suitor to engender self-confidence. Over the past few years, PPC has faced several boardroom battles, a succession of senior executives and massive capital expenditure in the rest of Africa, which turned out to be badly timed. In 2016, the company was forced to urgently raise new capital from shareholders after its bonds were downgraded to junk. Cement demand has been weak, while aggressive new competitors have entered the market, shredding margins. Capital expenditure has absorbed cash.But every asset is cheap at the right price. As PPC’s share price fell, potential acquirers took notice. One o...
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