LOSS-MAKING concrete company Readymix has walked away from tentative takeover talks with unnamed suitors, after a firm offer failed to materialise.
Last October, Readymix, which is controlled by Mexico-based building materials firm Cemex, said it had received approaches that could lead to an offer for the company. However although discussions did take place, no “firm and fully financed” offer was received by Readymix, the company said yesterday.
“The board has been informed that no such offer is likely to be received in the short term,” it said in an announcement to the Irish Stock Exchange. As a result, discussions with all third parties have been terminated.
According to one analyst, the reference to “third parties” in Readymix’s statement rules out Cemex as being among the unnamed suitors, as it already owns 61.2 per cent of the company.
In terms of Irish interest, CRH was thought unlikely to throw its hat into the ring because of competition issues, but it is believed possible that a privately owned player may have made an approach.
Readymix declined to make any comment on the identity of the interested parties. Although its share price dipped at one point yesterday, it closed unchanged at 20 cents.
Analysts said the announcement came as no surprise to the market. “The potential for a successful offer being forthcoming from a third party was always going to be difficult,” said Bloxham analyst Pauric Quinn.
“Potential interested parties would be acquiring a loss-making business that operates in a fiercely competitive market which has excess capacity in place and is competing against a number of well resourced and strongly positioned competitors including CRH.”
Getting finance for such a deal would be very difficult, Mr Quinn added.
Readymix also said that trading remained difficult in the Irish construction industry, and that it was continuing to focus on cash-management and cost-minimisation. It has operations in Ireland and the Isle of Man.
In a trading statement in January, Readymix, which has a market capitalisation of about €21 million, said it expected an operating loss of about € 15 million for 2010.
