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City tells Tarmac to merge
00:00 25 May 1995
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City analyst NatWest Securities has reaffirmed its view that Tarmac
should merge with 'an international entity' following its sale of
its brick division.
In an update of the company's position following the sale, analyst Rob Donald says that the firm's shares are not cheap and that the firm either needs house-price inflation to pick up sharply or needs to seek a merger. NatWest says that at the very least Tarmac should split itself into two separate entities (i) Housebuilding and Contracting and (ii) Aggregates and Building Materials. 'In the absence of either of these occurring the shares should underperform the market.'
The analyst sees Ibstock as the long term principal beneficiary of the deal which it reckons will help the firm over the medium term through more robust pricing.
Ibstock is to pay around œ80 million for the 300 million brick capacity - this cash is required by Tarmac to reinvest in its landbank.
In an update of the company's position following the sale, analyst Rob Donald says that the firm's shares are not cheap and that the firm either needs house-price inflation to pick up sharply or needs to seek a merger. NatWest says that at the very least Tarmac should split itself into two separate entities (i) Housebuilding and Contracting and (ii) Aggregates and Building Materials. 'In the absence of either of these occurring the shares should underperform the market.'
The analyst sees Ibstock as the long term principal beneficiary of the deal which it reckons will help the firm over the medium term through more robust pricing.
Ibstock is to pay around œ80 million for the 300 million brick capacity - this cash is required by Tarmac to reinvest in its landbank.
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