Qassim Cement (3040) signed a non-binding Memorandum of Understanding with its competitor Hail Cement (3001) to start discussions on a securities exchange deal, allowing Qassim to acquire all of Hail’s issued shares.
The two companies will conduct relevant due diligence studies on the potential transaction.
Hail Cement and Qassim Cement have agreed to move forward with discussions in the context of a non-binding swap factor, according to which Hail Cement shareholders will receive 0.1933 new shares in Qassim Cement, for each share they own in Hail Cement, the “swap factor”.
If the potential transaction is completed according to the swap factor, the total to be paid by Qassim Cement to Hail Cement shareholders will be approximately 18.92 million new shares in Qassim Cement
Why this Matters
Based on the closing price of Qassim Cement’s share of SAR 75 on September 21, the valuation of the share price of Hail Cement for the purposes of the potential transaction, if completed, will be SAR 14.5 per share.
This represents an 18.7% increase in the share price of Hail Cement compared to the closing price on September 21.
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