HARARE- PPC has issued another cautionary statement advising shareholders of a firm offer to acquire shares in the company, received from Fairfax a Canada based investments holding company.

PPC had prior to the cautionary issuance, extended a previous cautionary statement with regards to the proposed merger of PPC and Afrisam, highlighting that Afrisam has altered the heads of terms  for the engagement.

PPC is an African cement giant and has operations across the region including Zimbabwe with the key operation being South Africa. Its shares are traded on the JSE in South Africa and on the ZSE in Zimbabwe.

Fairfax through its subsidiaries is engaged in property and casualty insurance and reinsurance and investment management. The company is listed on the Toronto Stock Exchange and has a market capitalization of US$600 million and $400 million investible cash.

In the conditional offer Fairfax is offering to acquire ordinary shares representing a value of R2 billion of the issued ordinary stated capital of PPC, at an offer price of R5.75 per ordinary share of PPC.

Given a market capitalisation of R7.23 billion, the offer represents 30% of the current market value, but is at a discount to the JSE per share last traded price of R6.14.

If agreed to, the offer will come in handy for the debt ridden company which at full year had a huge debt of approximately R4.7 billion whose cost has been going up thereby negatively impacting profitability.

But  the transaction will not be a stroll in the park for PPC as Fairfax demands that PPC accepts and completes a deal to merge with Afrisam on Fairfax’s stated terms.

Afrisam is a South African supplier of construction materials and technical solutions such as cement, aggregates and ready mix concrete.

The deal to merge the 2 entities through an equity swap has however failed to materialise in a very long time and recently Afrisam altered the terms of engagement thus further taking the deal backwards.