Aliko Dangote, Africa’s richest man, is among those considering counteroffers for PPC Group Ltd. that could signal a bidding contest for South Africa’s largest cement maker, according to people familiar with the matter.
Dangote Cement Plc sees a bid for the Johannesburg-based company as a way to accelerate expansion outside Nigeria, said the people, who asked not to be named as the matter is private. PPC will consider any rival offers to the joint approach by Canada’s Fairfax Financial Holdings Ltd. and domestic rival AfriSam Group Pty Ltd. and present them to shareholders in early October, one of the people said.
LafargeHolcim Ltd., the world’s biggest cement maker based in Jona, Switzerland, and Germany’s HeidelbergCement AG are also monitoring PPC’s situation, the people said. Titan Cement Co. SA of Greece is looking at the South African company, according to one of the people. The cement makers’ interest was sparked after Toronto-based Fairfax offered to buy 2 billion rand of PPC’s shares and support a merger with AfriSam earlier this week, the people said. The proposal “significantly undervalued” the business, PPC said at the time.
Spokespeople for Dangote, LafargeHolcim, HeidelbergCement, Titan, Fairfax and PPC declined to comment.
The future ownership of PPC is up for grabs after merger talks with AfriSam failed for a second time last month following two-and-a-half years of on-off negotiations.
Both companies have been struggling with high debt levels, which Fairfax offered to resolve with its unexpected entrance to the saga this week. The Toronto-based company said it would recapitalize AfriSam, enabling it to settle outstanding loans, and buy 2 billion rand worth of PPC shares at 5.75 rand each.
PPC’s current share price of 6.38 rand suggests investors expect a higher offer to emerge. (Bloomberg)
