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Qassim Cement Company said it has entered into a non-binding agreement with leading Saudi group Hail Cement Company to acquire all of its issued shares through a share exchange offer.
As per the transaction, the shareholders of Hail Cement will receive 0.1933 newly issued shares in Qassim Cement for every share they own in Hail Cement, said Qassim Cement Company in its filing to the Saudi bourse Tadawul.
The total consideration payable to Hail’s shareholders, will be 18.92 million newly issued shares, should the Proposed Transaction complete based on the Exchange Ratio, it added.
At a closing share price of SR75 per Qassim Cement share on September 21, the proposed transaction, if completed, would value each Hail Cement share at SR14.5, which represents a premium of 18.7% to the Hail Cement share price.
According to Qassim Cement, the consideration payable to Hail’s shareholders will be the issuance of new shares in Qassim Cement in accordance with Article 26 of the Merger and Acquisition Regulations, which would result in the delisting of Hail shares, and becoming a company wholly owned by Qassim.
Subject to the satisfactory completion of financial evaluation of the Proposed Transaction and the results of the relevant due diligence exercise, Hail Cement and Qassim Cement will proceed with discussions in the context of a non-binding exchange ratio.
The Proposed Transaction is subject to the regulatory approvals, including approvals from the competent authorities and the approval of the extraordinary general assembly of each company, stated Qassim in the filing. No financial advisor has been appointed at this stage, it stated.
According to Qassim Cement, both parties will perform due diligence on the proposed transaction. Upon completion of the relevant financial evaluation and after consideration of the due diligence, the duo will begin discussions on a non-binding exchange ratio, it added.-TradeArabia News Service