One of PPC’s largest shareholders is pushing for chairman Peter Nelson to be replaced after talks with potential suitors failed and the company seeks to grow independently, according to people familiar with the matter.
Prudential Investment Managers South Africa has sent a formal request to South Africa’s largest cement maker demanding Nelson’s removal, said the people, who asked not to be identified because the investor’s plans haven’t been made public. The chairman was responsible for overseeing the acquisition negotiations and Prudential wants a fresh appointment to focus on improving operations, one of the people said.
The Johannesburg-based cement maker is holding a board meeting in Rwanda this week, where the situation will be discussed, according to the same person.
“Prudential has been engaging with the board of PPC,” Chris Wood, head of equities at the Cape Town-based money manager, said in an emailed response to questions, declining to comment further. PPC didn’t immediately comment.
Nelson was appointed chairman in October 2016, shortly before PPC revived merger talks with local rival AfriSam South Africa. Those negotiations evolved into an offer by Canadian insurer Fairfax Financial Holdings for part of PPC on condition the AfriSam tie-up was completed. This in turn led to a range of approaches from international companies including LafargeHolcim, the world’s biggest cement maker, and Dublin-based CRH.
PPC said Fairfax’s offer of R5.75 a share was too low, and the other interested parties walked away. The stock has since gained, rising 13% in 2018 to R7.87 as of 12:28 pm in Johannesburg on Thursday. That values the company at R12.5 billion ($1.1 billion).
PPC confirmed Johan Claassen as chief executive officer last week. He was made interim CEO in July after Darryll Castle quit in the middle of talks with AfriSam.
Prudential holds about 15% of PPC on behalf of clients, according to Wood. That makes it the cement maker’s biggest shareholder after the Public Investment Corporation, according to data compiled by Bloomberg. The South African money manager is almost 50% owned by UK insurer Prudential Plc, according to its website.
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