Lagos – Dangote Cement said it approached PPC [JSE:PPC] about a takeover deal, signaling the start of a possible bidding war for South Africa’s biggest cement maker.
Dangote communicated its interest to PPC’s board “with respect to the acquisition of the entire share capital,” the Lagos-based company said on Wednesday in a statement to the Nigerian Stock Exchange. “This communication is still at the preliminary stage.”
The approach by the company owned by Aliko Dangote, Africa’s richest person, follows a joint offer from Canada’s Fairfax Financial and domestic rival AfriSam.
While PPC will consider all bids, the Public Investment Corporation, its largest shareholder, supports a tie up with AfriSam and Fairfax, people familiar with the matter said this week.
“Dangote has the capacity to pull the deal off,” Pabina Yinkere, an analyst at Vetiva Capital Management, said by phone from Lagos. “It is a very liquid company with a very strong cash flow. It is a good strategy that would help Dangote consolidate leadership in the South African market.”
PPC shares surged 4.03% to R6.20 by 13:23 on the JSE after it reached an intra-day high of R6.40. The company is valued at about R9.5bn. Dangote, listed in Lagos, has a market capitalisation of $9.9bn