BUILDING MATERIALS group Readymix has announced that it has received approaches for the company and is in discussions that could result in a takeover.
“Discussions are at an early stage and there can be no certainty that these will lead to an offer for Readymix nor as to the terms on which an offer, if any, might be made,” the company said in a brief statement to the Irish Stock Exchange yesterday.
It said further announcements would be made when appropriate.
Analysts said that it was likely that Readymix’s majority shareholder, the Mexico-based building materials firm Cemex, was one of the interested parties behind the approach.
Shares in Readymix, which has a market capitalisation of about €18.6 million, rose 41 per cent on the Iseq index following its statement. Its share price closed at 24 cent, up 7 cent.
Readymix reported a loss of €6.6 million for the first six months of the year in August. The deficit was roughly in line with the first half of last year, when the company lost €6.9 million before tax.
The company reported that the ongoing decline in the construction market left first-half revenues trailing the same period last year by 30 per cent.
Cemex has a 61.2 per cent stake in Readymix. It is possible that it is either looking to mount a full takeover or considering a sale of part or all of its stake to a third party.
On Monday, the firm, which is the largest cement maker in North America, announced plans to acquire the interests of one of its US-based partners – Ready Mix USA – in two joint ventures for about $360 million.
In a note to shareholders, Bloxham Stockbrokers ruled out potential bids for Readymix from the largest players in the Irish cement market, including CRH, citing competition hurdles and an overcapacity in the market at present.
Earlier this year, Readymix, which was involved in the construction of the Aviva stadium and the Titanic quarter in Belfast, said there was a lack of new infrastructural projects in the pipeline.
But although trading conditions remain tough for the company, with the firm recently stating that it did not expect any improvement in the construction market in the short term, analysts noted that it has a strong asset base.
Readymix, which has operations in the Republic and Northern Ireland, as well as the Isle of Man, employs about 360 people, half of whom are based in Dublin.
Partly as a result of Cemex’s large stake, the stock usually attracts low trading volumes on the Iseq.
