Hostile bid for Vulcan
First publishedon www.AggBusiness.com
In the US, Martin Marietta Materials has launched a $4.8 billion (€3.7 billion) hostile takeover bid for gravel, sand and stone supplier Vulcan Materials, which has extensive operations in Azusa and Irwindale in the state of California.
In an open letter to Vulcan chairman and CEO Donald James, Martin Marietta chairman and CEO, C. Howard Nye, said his company is taking its offer directly to Vulcan's shareholders because Vulcan officials cut off negotiations that began more than a year and a half ago.
Nye said the acquisition makes sense in light of the nation's struggling economy and the current state of economic uncertainty.
Vulcan owns 270 acres of land in Azusa with a permit to mine 190 acres of the Azusa Rock Quarry, and it also operates its Reliance Facility to process mined material in Irwindale.
Vulcan also owns a former mining operation in Irwindale that is now an inert landfill, accepting only construction materials.
Martin Marietta's proposal means that executives from both companies would serve on the combined company's board. James would be chairman and Nye would serve as president and CEO.
Martin Marietta claims the combined company could save between $200-250 million (€154-192 million) in costs.
James said his company is disappointed that "despite these substantial benefits," Vulcan has been unwilling to move ahead toward a definitive agreement.
"We believe our proposal is compelling and transformative for the stakeholders of both Vulcan and Martin Marietta," Nye wrote in his letter.
A statement from Vulcan, based in Birmingham, state of Alabama, said: "Vulcan Materials will carefully review the proposal and determine the course of action that it believes is in the best interests of the company and its shareholders."
Vulcan has advised its shareholders to take no action until Vulcan's board has time to review the offer.
The company intends to advise shareholders of its recommendation regarding the offer within ten business days by making available to shareholders and filing with the Securities and Exchange Commission a solicitation/recommendation statement.