Qassim Cement, Hail Cement publish shareholder circulars, offer documents for acquisition deal

The shareholders’ circular issued by QCC to its shareholders, related to the increase in QCC's share capital in order to fully acquire HCC through a stock exchange offer to HCC’s shareholders, pursuant to Article (26) of the Merger and Acquisition (M&A) Regulations.

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It includes the details of the transaction, its terms and conditions and other related matters, including related parties, completion procedures and the relevant risks.

QCC's board of directors directed shareholders to carefully read and consider all information mentioned in the shareholders’ circular prior to making an informed decision. If in doubt, they must consult an independent financial advisor, licensed by the Capital Market Authority (CMA). They should also rely on their own examination of the transaction with respect to individual objectives, financial position and investment needs.

Meanwhile, the offer document, issued by QCC and addressed to HCC’s shareholders, was issued. It includes all details related to the offer, pursuant to Article (38) of the M&A Regulations, with regard to the takeover of HCC’s shares in exchange for new shares to be issued in QCC to HCC’s shareholders.

QCC noted that HCC’s shareholders should carefully read and consider the offer document and the board circular to be issued by HCC’s board of directors prior to making an informed decision related to the transaction.

The transaction timetable was also released, mapping out the proposed dates for the main events of the transaction implementation, pursuant to Article 17(c) of the M&A Regulations.

In a separate statement, HCC's board announced issuing the shareholders’ circular for this transaction, which has been prepared in accordance the requirements of Article (39) of the M&A Regulations. It includes the HCC board's opinion on QCC’s offer, addressed to HCC shareholders. It also includes independent advice provided to the HCC board by SNB Capital, which has been appointed as financial advisor on the planned acquisition.

HCC board also noted that each shareholder must carefully study the circular and offer document before making an investment decision. If in doubt, such a shareholder is advised to consult an independent, CMA-licensed financial advisor, besides relying on their personal examination of the transaction.

According to HCC's board circular, board members believe that the acquisition deal is fair and reasonable, after exercising appropriate due diligence with the assistance of their advisors, and after factoring in the market situation on the date of publication of this circular, and the acquisition's potential benefits and edges. This is in addition to independent consultation from SNB Capital (in its capacity as HCC's financial advisor on the deal), who believes that the agreed-upon swap factor is financially fair for HCC and its shareholders.

HCC's board members, according to the circular, also believe that the planned acquisition deal is in the interest of HCC and its shareholders. Therefore, they recommend its approval.

According to the circular, the HCC board noted that the company did not receive any alternative offers up until the date of the circular’s publication.

All of HCC's board members who own shares in the company intend to vote to approve the planned acquisition in the forthcoming extraordinary general meeting (EGM).

In December 2023, QCC signed a binding agreement with HCC, under which the former offered HCC shareholders as many as 0.21 QCC shares for each HCC share. This is to fully acquire HCC by issuing new QCC shares, Argaam’s data showed.

Last week, the CMA approved QCC’s application to increase its capital from SAR 900 million to SAR 1.1 billion by issuing 20.56 million ordinary shares to acquire HCC through a stock exchange offer.

Shareholders of both companies have set June 10 as the date for when their EGMs will convene to vote on the potential acquisition.