Martin Marietta Materials, a big producer of sand and gravel, is in late-stage talks to acquire Texas Industries, according to people briefed on the matter.
A deal for Texas Industries, a construction supplies company, could be announced early next week, these people said.
Texas Industries has a market value of more than $2 billion. On Friday, Texas Industries’ share price leapt 9.27 percent after Bloomberg News reported that a deal could be coming soon.
If the stock trades above the price Martin Marietta had been aiming to pay, the deal could be derailed. And the people briefed on the matter cautioned that the deal could still fall apart.
The two companies were in talks about a sale last year but didn’t go ahead with a transaction, but talks were recently restarted about what could be an all-stock deal. In after hours trading, Texas Industries’ share price was down 3.5 per cent.
Shares of Martin Marietta, which has a market value of about $4.8 billion, were down 4.4 percent on news of the potential acquisition, suggesting some investor skepticism for such a deal.
Just two shareholders control more than 50 percent of Texas Industries’ stock. Southeastern Asset Management, the investor that opposed the Dell buyout, owns about 28 percent of shares, while NNS, a group controlled by Egyptian billionaire Nassef Sawiris, owns 23 per cent.
A deal for Texas Industries’ would be something of a vindication for Martin Marietta, which tried and failed to take over rival Vulcan Materials two years ago. That deal led to a messy legal dispute, and came at a low point for the company. Since that deal fell apart, Martin Marietta shares have risen steadily, gaining 29 percent in the last two years.
