Building materials giant CRH faces a court battle over its recent €300 million purchase of a 26.3 per cent stake in Spanish cement and concrete manufacturer, Uniland. Barry O'Halloran reports.
The Spanish company yesterday issued a statement saying it was challenging the purchase on the grounds that it was purchased "fraudulently and unlawfully".
However, a CRH statement specifically rejected this claim yesterday and said the stake was legally held.
CRH bought its interest in Uniland in December for €300 million. The deal was announced on the 30th of the month, days before it was due to issue a trading statement.
The Spanish company argues that the shareholders who sold the stake to CRH contravened its articles of association by offering their holding to the Irish group ahead of Uniland's other stake holders.
The children of two families who merged their businesses to form Uniland over 30 years ago own the company. It is a private entity and not listed on any stock exchange. It has over 80 individual shareholders according to some estimates.
The Barcelona-based company said yesterday that it had issued proceedings in the Spanish commercial court on Wednesday to force CRH to return the shares. The company also wants an order forcing the shareholders who sold up to offer the stake to the rest of its shareholders for the same price at which they agreed to sell it to CRH.
According to the Uniland statement, the deal was done in two phases. Certain shareholders sold over 6 per cent of its share capital to a number of holding companies - Sagarra Inversiones SL, Freixa Inversiones SL and Wimec AG Zug.
These entities already held 20 per cent of the group. CRH then bought the holding companies, whose principle assets were its holdings in Uniland.
The Uniland board said yesterday that it "considers that this indirect purchase by CRH was carried out fraudulently and in violation of the company's articles, since it contravened the pre-emption rights of the company itself and of its other shareholders".
In response, CRH said it categorically rejected the claims. "The press release is inaccurate in a number of factual respects," it said. "CRH and its Spanish legal advisers are satisfied that it has full and legal title to its 26.3 per cent shareholding."
CRH refused to elaborate on which elements of the Uniland statement were factually inaccurate.
Uniland is one of the biggest players in its sector in Spain, and has interests in Argentina and Tunisia. In 2004 it had sales of €423 million and profits of €111 million. CRH also has businesses in Spain and is both a customer and competitor of the group.
CRH is the biggest company on the Irish Stock Exchange. It has building materials and products businesses in Ireland, Britain, Europe and the US.
It is the largest company in its business in the US, and the fourth biggest operator in the world. The company started out as Cement Roadstone Holdings, and began to grow through acquisition in the early eighties. The group's sales now exceed €10 billion a year.
