Tianrui International Holding Company has refused to accept an offer for takeover of China Shanshui Cement Group Ltd. The company said that a takeover plan would be unable to resolve the challenges faced by the fourth largest cement producer in China.
Two of the biggest shareholders of Shanshui Cement – China National Building Material Co. and Asia Cement Corp., which jointly account for 38 per cent – are taking into consideration a cash offer to rope in the shares that they do not already control. A statement released to the Hong Kong stock exchange on Tuesday revealed that Tianrui is the largest shareholder of Shanshui Cement, with a share of 28.2 per cent.
In an e-mailed response to Bloomberg, Tianrui on Wednesday said that China National Building Material or Asia Cement had not informed the company of their decision or the general offer. Tianrui believes that a general offer will not be able to resolve Shanshui’s problems and will ultimately be useless. As a result, Tianrui will not be accepting any general offer for the same.
The proposal from China National Building Material and Asia Cement fuels the fight for power of the US$ 2.74 billion cement producer. This comes just a week before a special meeting is held for stakeholders to vote on whether or not to replace the board members of Shanshui Cement.
Seven directors, including Zhang Bin, the chairman, are looking to be replaced by Tianrui. The company is also planning to appoint the nominees at the meeting to be held on July 29. Both Taipei-based China National Building Material and Asia Cement have been in opposition for Tianrui’s plan.
In an email on Wednesday Tianrui said that the reason behind the proposal to change the management is the interest of the shareholders. The performance of the management, compared to its peers, is not good enough.