Cemex subsidiary to bid for majority ownership of Carib Cement parent
Mexican-based CEMEX today announced that one of its indirect subsidiaries, Sierra Trading, will present an offer and take-over bid to all shareholders of Trinidad Cement Limited (TCL).
Sierra wants to acquire up to 132.6 million ordinary shares in TCL for TT$4.50 (roughly J$58) in cash per TCL share. The Trinidad & Tobago dollar is currently trading at J$6.72 to US$1. TCL trades as a publicly listed company in Trinidad & Tobago, Jamaica and Barbados.
If taken up it would move Sierra’s existing share ownership in TCL of approximately 39.5 per cent to 74.9 per cent of the equity share capital.
"Full acceptance of the offer would result in a cash payment by Sierra of approximately TT$597 million (US$89 million). The offer price represents a premium of 33.1 per cent over the December 1, 2016 closing price of TCL’s shares on the Trinidad & Tobago Stock Exchange," stated a release from CEMEX obtained by The Gleaner.
The cement producer indicated that he offer will be conditional on Sierra acquiring at least an amount of TCL shares that would allow CEMEX to consolidate TCL. Unless extended, the offer period is expected to close on January 10, 2017.
If the offer is successful, TCL will continue operating as usual. Additionally, TCL will be maintained as a publicly listed company on the Trinidad & Tobago Stock Exchange with the benefit of a strong local shareholding together with the enhanced benefit of proven management and operational expertise from CEMEX, according to the statement.
TCL’s main operations are in Trinidad & Tobago, Jamaica and Barbados. It is the majority shareholder of Caribbean Cement Company Limited, the main cement producer in Jamaica.
TCL and its subsidiaries as of September 30, 2016 reported earnings before interest, tax, depreciation and amortisation (EBITDA) of approximately US$77 million for the last 12 months, net debt of approximately US$113 million, representing a net financial leverage of approximately 1.5 times.
If the offer is successful, TCL would be consolidated with CEMEX.
“This offer represents a clear sign of our commitment to TCL and the region,” said Fernando A. Gonzalez, CEO of CEMEX.
“In addition, although we believe that our offer is attractive given the premium to the current share price, as part of this commitment it is also important to us that TCL remains a listed company so that local investors can continue to benefit from the development of TCL in the future,” he added.
CEMEX is a global building materials company that provides quality products and service to customers and communities in more than 50 countries.