Cemex a step closer to TCL takeover

“What this means,” Brent Salvary, director, portfolio management at KSBM Asset Management said yesterday, “is that they can consolidate TCL’s accounts with theirs and therefore they can take all revenues, profits and expenses and put onto their books with a line item which reduces the amounts not owned by Cemex. This has the effect of pumping up Cemex’s profits.” Cemex gave notice of meeting the condition in advertisements in yesterday’s papers.

It also said other conditions which remain to be met include getting a foreign investment licence, which the company said has already been applied for.

The ads continue: “In the meantime, rights of TCL shareholders to withdraw any acceptances tendered by them remain unchanged and are set out in the Amended Offer…” It continues that the offer period continues until Tuesday.

Meanwhile, accounting firm, Ernst and Young (EY), has valued TCL shares at between TT$5.60 and TT$6.18 per share in a January 18, 2017 Fairness Opinion requested by the board of cement and building supplies manufacturer.

However, they have refused to make an assessment of whether this is a fair price for the shares and have advised shareholders to obtain advice from investment professionals or lawyers.

The company’s board has also directed shareholders to do the same, even though it has told them, outright, to reject Cemex’s amended offer made through its subsidiary, Sierra Trading.

The amended offer made on January 9, saw the offer price move from $4.50 per share in December, to $5.07 earlier this month. All shareholders, except those living in Barbados, also had the option of being paid in US dollars for their holdings.

However, EY said in its opinion, after having considered historical and current financial data, as well the Cemex offer that, “the estimate of fair market value per ordinary share based on the income approach is TT$5.13 per share and that based on the market approach is TT$6.64, leading to an average of TT$5.89 per ordinary share. “Our conclusion of the estimate of fair market value per ordinary share would be expressed as TT$5.60 to TT$6.18…” Cemex is seeking to acquire 132,616,942 shares which will give it 79.4 percent of TCL. The company currently holds 39.5 percent.