Anglo bid trumps Ennstone in contest for Johnston

Anglo American, the world's leading mining company, yesterday swooped on Johnston Group, the quarrying business, with a £53m cash bid that trumped a £43m offer tabled at the end of July by Ennstone, the building materials group.

Anglo American, the world's leading mining company, yesterday swooped on Johnston Group, the quarrying business, with a £53m cash bid that trumped a £43m offer tabled at the end of July by Ennstone, the building materials group.

The bid, announced yesterday afternoon, put an end to a saga that has engulfed Johnston and the eponymous family who control 50.1 per cent of the shares.

Anglo said it intended to sell the Saxon fire engine business that Johnston also owns on completion of the deal.

Led by Michael Johnston, the family had accepted Ennstone's cash and shares offer but the company's chairman, Chris Woodwark, believed the deal undervalued the business. He set up a board committee independent of the family to seek alternative offers that would represent best value for all shareholders.

Yesterday he unveiled the Anglo American deal, the terms of which released the Johnston family from their commitment to Ennstone's offer. At the same time Anglo agreed to sell to Ennstone one of Johnston's quarries, Leinthall, for £11.25m. A second Johnston quarry, Leaton, was already 49 per cent owned by Tarmac Roadstone, an Anglo subsidiary, which will now come under full Anglo control.

Ennstone's original offer was running into trouble having failed to get the backing of its major shareholder, Aggregate Industries. Anglo was in a strong position to launch a rival bid, being a 24.9 per cent shareholder in Johnston. Its offer of 491p a share represents a premium of 106.7 per cent over the closing price of Johnston shares before Ennstone's cash and shares bid was announced.

Mr Woodwark said: "We only had a very short time to pull it off. I took on the chairmanship in January, put in a strategic review, produced a plan, put it to the board and recruited a chief executive and three managing directors. Then Ennstone launched its bid. I formed an independent committee of directors because I had the view that there was more value."

Robbie Robertson, the chief executive of Anglo Industrial Minerals, said: "The integration of Johnston's construction materials business represents an attractive opportunity to enhance our strategy in the UK and follows our original investment in acquiring 24.9 per cent in 2002 and 2003."