Hail Cement Company announced that it had signed a binding implementation agreement with Qassim Cement on December 21, 2023, according to which it was agreed that Qassim Cement would make an offer to Hail Cement shareholders to acquire all Hail Cement shares in exchange for issuing new shares in Qassim Cement.
The company explained, in a statement today, Sunday, on Tadawul, that this comes in accordance with the provisions of Article (26) of the Mergers and Acquisitions Regulations and in accordance with the rules for offering securities and continuing obligations issued by the Board of the Capital Market Authority, as well as in accordance with a number of terms and conditions stipulated in the implementation agreement.
The company added that based on the final agreed-upon exchange factor of 0.21 shares in Qassim Cement for every share in Hail Cement, and the closing price of Qassim Cement shares of 63.20 riyals as of December 21, 2023 (which is the last trading day prior to the date of publication of this Announcement), the valuation of Hail Cement shares for the purposes of the deal is 13.27 riyals, and the valuation of the total value of Hail Cement shares for the purposes of the deal is 1.3 billion riyals.
The company indicated that after completing the deal, Hail Cement shareholders will own 18.6% of Qassim Cement’s capital after increasing its capital as a result of the deal. After obtaining the necessary regulatory approvals, Qassim Cement will publish an offer document containing all the details related to the deal. The company will also Hail publishes the Board of Directors’ circular to its shareholders.
It also noted that the Qassim Cement Company’s simultaneous announcement of concluding the implementation agreement does not represent an announcement of its confirmed intention to submit an offer for the purposes of the Mergers and Acquisitions Regulations issued by the Capital Market Authority Council, and the issuance of the confirmed intention announcement is subject to a number of conditions contained in the implementation agreement related to coordination with a number of parties. Regulatory requirements to confirm approval requirements regarding the deal, and the confirmed intention to submit a bid by Qassim Cement Company will be announced at a later time after these conditions are met.
The company indicated that the deal includes a related party, as Qassim Cement established a private investment fund managed by a licensed financial market institution for the purpose of investing in stocks and securities, and Qassim Cement owns all of its units.
She also added that this investment fund owns 2.31 million Hail Cement shares, representing 2.36% in Hail Cement’s capital, and this investment fund is considered a related party in accordance with the Mergers and Acquisitions Regulations.
Last September, the company signed a non-binding memorandum of understanding with Hail Cement Company, according to which the two companies agreed to begin discussions regarding a securities swap deal under which Qassim Cement would acquire all issued shares in Hail Cement.
