Investment: Rugby's pounds 250m sell-off permits Scancem bids

RUGBY, Britain's third-biggest cement producer, is to use the proceeds of a pounds 250m disposal programme to bid for assets in Scancem, the Nordic building materials giant.

The UK group yesterday pleased the City with radical plans to sell all its joinery and materials businesses to focus on cement and lime operations.

Rugby said it was in advanced talks with Jeld-Wen, a private US company, over the sale of its US, UK and Australian joinery companies, which make doors and windowframes, and its US distribution subsidiary. The disposals are likely to net Rugby over pounds 250m. They will involve the loss of pounds 700m of sales, 70 per cent of group turnover.

The chief executive, Peter Johnson, said the sales would help Rugby make inroads into the global cement market. "The cement industry is like a jungle and you cannot go into the jungle with one eye on the joinery business," he said.

Funds raised will enable Rugby to participate in the auction for Scancem, owner of Castle Cement, the second-ranked UK cement maker. The Scandinavian company is being sold by its joint owners, Skanska of Sweden and Aker of Norway. The sale has attracted interest from European building materials groups, including CRH of Ireland, France's Lafarge and British group RMC.

Analysts believe Rugby will not be able to buy the whole group, but could bid for its east European assets. Scancem owns firms in Finland, the Baltic States and Poland, which fit with Rugby's Polish business.

The UK company could also buy parts of Castle Cement, although buying the entire group would be blocked on competition grounds.

News of the sales and potential purchases overshadowed Rugby's 1998 results. The group posted a small increase in operating profit to pounds 76.9m on sales down 4 per cent to pounds 1.02bn.

Analysts said the restructuring raised the chance of a bid for Rugby. "[After the disposals] they are a very tidied-up company. If there is a predator, Rugby is doing all the dirty work for them," said David Taylor of Teather & Greenwood.

After the sale of Castle Cement, Rugby will be the only large UK cement producer available to buy. It could attract European giants such as Lafarge and CRH, believe analysts. Profit forecasts for 1999 and the p/e ratio are now academic, but given the bid prospects Rugby's shares, up 2p to 113p yesterday, are a good speculative buy.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
New Articles
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam