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Johannesburg - PPC [JSE:PPC] chairperson Peter Nelson said the cement maker has received letters representing "likely more than" 25% of shareholders indicating opposition to a proposed merger with local rival AfriSam.
The tie-up "requires 75% of shareholders to vote for it and obviously more than 25% have a view that they are not going to support it," Nelson said by phone late on Thursday.
"We have received the letters, but we are in a process that has to run its course."
The simmering opposition casts doubt over a partial offer by Fairfax Financial of Canada that was made on condition that the SA company merges with AfriSam.
Potential counter bidders should be granted enough time to conduct full due diligence, PPC said earlier this week.
Nigerian competitor Dangote Cement, which has made an indicative proposal, will be granted a “reasonable period” to decide whether to table a firm proposal, the company said.
PPC’s biggest shareholder said to back Fairfax-AfriSam offer
The Public Investment Corp (PIC) is supporting the Fairfax offer, people familiar with the matter said last month. Africa’s biggest money manager owns about 11% of PPC, according to data compiled by Bloomberg. It’s also the biggest shareholder in AfriSam with about 65%.
For its part, PPC has said the bid of R5.75 a share for R2bn of stock undervalues the business and its prospects. The Fairfax proposal also includes a recapitalisation of AfriSam ahead of the merger. PPC has hired Investec [JSE:INP] to review the offer.
PPC shares fell 0.2% on Thursday to R6.45, valuing the company at R10.3bn.
The shareholders’ views were a matter for AfriSam rather than PPC “to reflect on,” Nelson said.
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