London, Nov 5: African resources conglomerate Anglo American PLC said Friday it agreed to acquire UK building materials company Tarmac PLC in a deal valued at 1.2 billion pounds ($1.95 billion or 1.87 billion euros), or 585 pence a share.Anglo American said that it will use its cash resources to finance most of its acquisition.
Anglo American resumed talks with Tarmac after Tarmac rejected an offer last Friday of 550 pence a share, or about 1.13 billion pounds. Tarmac had previously rejected a offer of 535 pence a share, or about 1.1 billion pounds.
The boards of the two companies said a merged entity will provide a platform for the combined business to participate in further consolidation of the heavy building materials industry in continental Europe.
The offer represents a premium of about 64 per cent to Tarmac's share price of 357 pence on October 25 -- the last day before Tarmac said it was approached by Anglo American.
It represents a premium of 6 per cent to Tarmac's closing share price of 554 pence Thursday.
Anglo American said it has received irrevocable undertakings from the Tarmac directors and from an institutional shareholder to accept the offer in respect of shares representing 17.5 per cent of Tarmac's existing issued ordinary share capital.
Anglo American also said it expects the acquisition will enhance its earnings per share from the first full financial year following the takeover.This enhancement would occur before taking into account any synergies arising and before exceptional costs and amortization of goodwill.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.