Calmat Rejects $988 Million Brierly Bid
LOS ANGELES (AP) _ Calmat Co., a major cement supplier in Western markets, said Wednesday its board has rejected as inadequate an offer from investor Ronald Brierley to take the company private for $40 a share.
New Zealand-born Brierley already owns 19 percent of Calmat’s 30.6 million shares, which values his bid at about $990 million for the remainder. He controls two of the 15 seats on the company’s board.
Calmat said its directors voted unanimously against the offer, which Brierley made last week.
Calmat rose 25 cents to $44 a share on the New York Stock Exchange Wednesday, indicating investors expect the bidding to go higher. The stock was trading at $31.875 a share before Brierley made his offer a week ago.
Calmat’s chief executive, A.F. Gerstell, said the board decided ″a sale is not in the best interest at this time given efforts to maximize shareholder values.″
Two years ago Calmat embarked on a strategy to boost shareholder value by selling unprofitable or marginally profitable assets and concentrating instead on its high-margin operations.
Gerstell said the plan has ″show substantial results, and we expect continuing increases in value.″
Previously, Gerstell has said that management is working with its investment banker on ″additional, more aggressive steps the company can take to continue this ongoing process.″
Calmat’s core businesses are in making cement, ready-mixed concrete, aggregate and hot-mixed asphalt. It also has valuable real estate holdings in California and Arizona.
In 1986, the company netted $44.1 million on revenues of $619 million. In the first nine months of last year, it earned $78.1 million on sales of $658.9 million.
Calmat was formed four years ago the merger of California Portland Cement Co. and Conrock Co.