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Anglo's Tarmac talks fail
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November 1, 1999: 5:14 a.m. ET
South African miner ends talks with building materials firm on $1.8B offer
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LONDON (CNNfn) - South African mining giant Anglo American confirmed Monday it was the mystery buyer behind Friday's £1.1 billion ($1.8 billion) approach for U.K. building materials producer Tarmac, but said negotiations between the companies have ended.
Anglo announced that two offers were made to Tarmac's board Friday, worth 535 pence and then 550 pence per share, although these were "summarily rejected" by Tarmac's board. Tarmac said the offer undervalued the company.
Tarmac's stock price collapsed more than 7 percent to 475 pence early Monday on disappointment following Anglo's announcement. Earlier the shares had jumped 5 percent in anticipation of a deal.
An Anglo spokesman refused to speculate on what action the company will take now, saying "we've got some thinking to do," before announcing the next move.
Anglo, which listed on the London Stock Exchange earlier this year, is the world's largest gold miner through its Anglogold subsidiary, and is known to be on the lookout for expansion opportunities.
Anglo is looking to boost the UK aggregates business it inherited when it merged with its Luxembourg-listed sister company, Minorco earlier this year. "The deal would have been part of our broader strategy of building up our presence in Britain and Europe," according to an Anglo spokesman. Anglo already has a substantial British building materials business.
Anglo has some mighty firepower, with reports suggesting the company can spend up to £3 billion on acquisitions.
Tarmac shares had been poor performers since the company demerged its building-services arm, Carillon (CLLN) in July. Tarmac stock was listed at 545 pence following the spin-off, but had slipped as low as 352 pence prior to last week's bid. Tarmac shares closed Friday at 512 pence. Anglo American shares fell almost 2 percent to 3,200 pence Monday.
Rugby fields approach
Separately, Tarmac's competitor Rugby (RBY) announced Monday that it too had received a possible takeover approach, valuing the company at around £740 million. Rugby promised a further statement later, and its shares rose more than 5 percent.
-- from staff and wire reports
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Anglo American
Tarmac
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