December 12, 2011 at 12:08 pm #2023
Martin Marietta Materials, Inc. Proposes Combination with Vulcan Materials Company in Stock-for-Stock Transaction; Commences Exchange Offer
December 12, 2011 10:08 AM ET
Martin Marietta Materials, Inc. MLM today announced that it has delivered a proposal to Vulcan Materials Company VMC and commenced an exchange offer to effect a business combination with Vulcan that would create a U.S.-based company that is the global leader in construction aggregates with a footprint reaching across North America. As of December 9, 2011, the combined market capitalization was $7.7 billion and the combined total enterprise value was $11.4 billion. The combined mineral reserves of the two companies would be 28 billion tons.
Ward Nye, Martin Mariettas President and Chief Executive Officer said, The combination of Martin Marietta and Vulcan is a compelling opportunity for both companies shareholders, customers, employees and the communities we serve. By bringing together our highly complementary assets, we have the opportunity to create the global leader in aggregates, led by the best team in the industry, drawn from both companies. The combined company will have one of the industrys strongest balance sheets and, as we achieve expected synergies of $200 to $250 million and continue to adhere to Martin Mariettas strict operational and financial discipline, the company will be well positioned to pursue a wide range of attractive growth opportunities and to continue delivering value to shareholders.
We also intend to maintain the dividend for the combined company at Martin Marietta’s current rate of $1.60 per Martin Marietta share annually, or the equivalent of $0.80 per Vulcan share annually, based on the proposed exchange ratio. This dividend rate is 20 times Vulcans current level, said Mr. Nye.
The proposal, including the exchange offer, has the unanimous support of the Martin Marietta Board of Directors. Under the terms of the exchange offer, each outstanding share of Vulcan will be exchanged for 0.50 Martin Marietta shares. The offer represents a premium for Vulcan shareholders of 15% to the average exchange ratio based on the closing share prices for Vulcan and Martin Marietta during the 10-day period ended December 9, 2011 and 18% to the average exchange ratio based on the closing share prices for Vulcan and Martin Marietta during the 30-day period ended December 9, 2011.
December 12, 2011 at 12:12 pm #4811
FYI – MLM has a lot of Ohio River Terminals that are mostly solids/aggreates (89% business income) but also has terminals that do some petcoke, petroleum,cement, steel & other petcoke related industry terminals.
Here is link to a PDF list of Ohio River – someMLM terminals @ http://www.lrp.usace.army.mil/navchart/oh/terminals.pdf
Not so sure that this is something Vulcan is completely for this (perhaps more a hostile takeover?). Vulcan also has ~319 terminals with most in aggreates & asphalt areas, but like Martin Marietta some in petroleum/petcoke/steel & other petcoke related industries
December 18, 2011 at 11:24 pm #4801
Vulcan Objects to Hostile Takeover Attempt
by Shiva Olvde Dec 17, 2011
The hostile takeover attempt involving two rock-bashing companies is getting even hostile-er.
Vulcan Materials, the object of a nearly $5 billion hostile takeover offer this week, hasnt formally recommended its shareholders should say no friggin way to the bid from smaller rival Martin Marietta Materials. But in a court filing late Friday, Vulcan made it clear it is not happy at all with the Martin Marietta takeover effort. And Vulcan may be even more unhappy that Martin Marietta launched its hostile bid in December. (Some lawyers holiday trip was ruined, perhaps?)
In the court filing reviewed by Deal Journal, Vulcans lawyers describe Martin Mariettas hostile offer as a surprise attack by Martin Marietta, which they say was covertly plotting an unfriendly takeover even as the two producers of gravel, sand and other building materials were negotiating a merger for months under friendly terms.
Vulcans board hasnt taken a public position on the Martin Marietta offer. The deadline for doing so is Dec. 23. But the court filing makes it clear that Vulcan believes Martin Mariettas offer is underpriced and the terms of the proposed merger are so unachievable and slanted in Martin Mariettas favor that the deal is unworkable.
Among other terms, the stock-exchange offer Martin Marietta has laid out is conditioned on the approval of the Vulcan board, a condition Vulcans court filing said has no likelihood of being satisfied any time in the foreseeable future, if ever.
So well ruin the pre-Christmas surprise. Vulcans recommendation on the hostile offer will surely be No.
Vulcan also complained in the filing (repeatedly) that Martin Marietta waited until just before the holidays to launch its attack with a cheap acquisition bid that seeks to snatch Vulcan for the lowest possible price and on its own terms.
In a response released Saturday, Martin Marietta CEO C. Howard Nye said the Vulcan court filing seriously mischaracterizes the proposed merger deal, and rejects it even though, according to the papers, Vulcans Board of Directors has not taken a public position on Martin Mariettas proposal.
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