A David and Goliath bid battle is brewing in the world of stone quarrying. The fight is over Bruntcliffe Aggregates, a small quarrying company, which yesterday agreed an all-share offer from Ennstone, a tiny stone company, valuing Bruntcliffe at pounds 26.2m.
Though Ennstone has already secured 50.9 per cent of Bruntcliffe's shares including its own stake, Aggregate Industries, its much larger quarrying rival, was yesterday locked in meetings to decide whether to launch a bid. Aggregate Industries has built a 22.7 per cent stake in Bruntcliffe. Capitalised at pounds 600m against Ennstone's pounds 17m, Aggregate clearly has the firepower to launch a much bigger offer. However, although Bruntcliffe is thought to have repeatedly courted a full bid and Ennstone has had talks to persuade the company to sell its stake, Aggregate has taken no action.
Vaughan McLeod, chairman of Ennstone, which is raising pounds 2.5m in a placing to help fund the deal, said he was puzzled about why Aggregate had not bid for Bruntcliffe, but was confident about the outcome for his own shareholders: "We own 9.4 per cent of Bruntcliffe. If Aggregate outbids us we will make a profit." He said that Aggregate would be under pressure to raise the stakes or sell up. "Doing nothing could give them a very big stake of a delisted company."
Juicy service contracts could see Bruntcliffe's three top directors sharing around pounds 1.5m following a bid. Bruntcliffe's shares rose 2.5p to 41.5p, compared to the 48.75p bid price.Reuse content