The Austrian group Wienerberger has said that it will review its options towards the British brick and tile manufacturer Ibstock, after CRH's raid on Ibstock gave it a 50.7 per cent controlling interest.
Wienerberger bought 29.9 per cent of Ibstock last October and was expected to bid, but is now faced with a situation where it cannot gain control. Wienerberger executive, Mr Erhard Schashcl, yesterday put a brave face on the situation, stating that it would get a "positive result" from its Ibstock investment.
But market sources believe that the Austrian group was taken absolutely by surprise by CRH's emergence as a friendly bidder for Ibstock and now has little option but to accept CRH's 70p sterling a share offer. Wienerberger bought its 29.9 per cent stake at 66p sterling a share and, given stockbroking charges, will make a negligible profit if it sells out to CRH.
The stock market gave a wary response to CRH's biggest acquisition, knocking the shares back 651/2p to £11.701/2 in Dublin and by 58p to £10.33 sterling in London, partly because some investors are negative about prospects for the British construction industry over the next couple years. But even at yesterday's closing price, CRH shares are only back to their level of late last week before the price took off as investors scrambled for shares that will almost certainly be part of the major Euro stock indices next year.
"There might be some doubts over the timing but CRH had to bid now or else never get the chance again. I think some investors used the Ibstock deal as an excuse to take profits from a share that hit an all-time high," commented one London dealer. He added that given that the acquisition will be immediately earnings-enhancing, yesterday's setback for CRH shares is likely to be temporary and that it should resume an upward course in the new year.
Whatever about the timing of the deal, market sources said that the raid on Ibstock shares was an extraordinary piece of corporate deal-making by CRH, and investment bankers Dresdner Kleinwort Benson and brokers Cazenove. Words like "audacious" were being used in the market yesterday for the highly secret stake-building on Monday which left a potentially hostile counter-bidder out in the cold with no prospect of mounting a counter-bid.
After getting the backing of the Ibstock board for its 70p a share offer, Cazenove immediately went into the market and told Ibstock institutional shareholders that it had an unnamed buyer at 70p a share conditional on the buyer getting a controlling stake. By late-afternoon on Tuesday, CRH had got enough Ibstock shares to go public on the deal and its offer to the remaining shareholders, including Wienerberger.
Market sources said the Take-over Panel had approved the strategy by CRH and its advisers. It is understood that CRH - which has a long-standing reputation for not getting involved in take-over battles - was reluctant to get involved in buying Ibstock unless it was assured of getting control.
