EXTRA: CRH's USD3.5 Billion Ash Grove Cement Bid Faces Competition

EXTRA: CRH's USD3.5 Billion Ash Grove Cement Bid Faces Competition”

CRH had said last month that it would finance the proposed deal for Ash Grove Cement through its existing financial resources.

Responding to the rival offer, CRH said its proposal remains in place, subject to the approval from Ash Grove shareholders.

Issuing a statement about the new proposal on Thursday, management at Ash Grove said it had "determined that such proposal could reasonably be expected to result in a superior proposal [to that offered by CRH] and has determined to engage with such third party regarding its proposal".

CRH, which is already North America's biggest maker of concrete products and second largest supplier of aggregate materials for construction, said it wanted to acquire Ash Grove to add extensive ready-mixed concrete, aggregates and logistics assets.

Reuters quoted Davy Stockbrokers analyst Robert Gardiner as commenting that the emergence of an eleventh-hour bidder was "perhaps not surprising given Ash Grove's attractive position in the U.S. cement market".

Summit's bid would surpass its own value of $3.65 billion.

"Ash Grove now has 15 days to evaluate the new proposal, the outcome of which will determine CRH's response", continued Gardiner.

"Summit Materials opportunistic offer of an Ash Grove merger will likely see investors decide between a cash offer at a 60 percent premium or a merger that gives no certainty to a cash exit price for large Ash Grove investors", said Darren McKinley, analyst at Dublin-based Merrion Stockbrokers.

Shares in CRH were down 1.7 percent on the news at 30.96 euros at 1115 GMT.

The emergence of a rival bid is "perhaps not surprising given Ash Grove's attractive position in the United States cement market", Robert Gardiner of Davy Research said in a note.

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