The Adbri Ltd (ASX: ABC) share price has flown higher by more than 30% after receiving a takeover offer.
Adbri is an Australian building products business, with concrete being one of the major products.
Takeover deal
Adbri released an ASX announcement which revealed it has received a non-binding offer from CRH and Barro Group for $3.20 cash per share, which represents a 41% premium to the last closing Adbri share price. It also represents a 51.9% premium to Adbri’s premium to the average price over the past month.
With that in mind, Adbri has entered into a process and exclusivity deed with CRH and the Barro Group to progress a potential transaction.
Under this offer, this makes CRH and the Barro Group associates and gives CRH an interest in the Adbri shares currently owned by the Barro Group, which represents 42.7% of Adbri shares. CRH said it will separately disclose a 4.6% interest.
CRH is a leading provider of building materials, with 75,800 people across 29 countries. It supposedly has market leadership in both North America and Europe.
CRH and the Barro Group has informed Adbri that this offer represents its best and final price in the absence of the competing proposal. There are a number of conditions, including completing satisfactory due diligence, no material adverse changes, Foreign Investment Review Board (FIRB) approval and directors recommending the proposal.
What the board thinks
Adbri has established an independent board committee to evaluate the proposal. The directors have agreed to enter into an exclusivity period until 28 February 2024.
There’s still work to be done, but the intention of the independent board members is to recommend the proposal as being in the best interests for Adbri shareholders in the absence of a superior proposal and subject to an independent expert concluding the proposal is fair and reasonable.
Adbri shareholders don’t need to take any actions at this stage.
Final thoughts on Adbri shares
If the offer progresses, it seems very appealing for shareholders compared to where the share price was. If I had bought shares in the last 18 months, I’d be quite happy with the offer. But, long-term shareholders may have been hoping for more.
