Summit Materials Stock Slips On $11.5B Sale To Rival Quickrete: Retail’s Cautious
By Stocktwits Inc | First Published Nov 25, 2024, 11:38 PM ISTThe transaction price represents a 36% premium to Summit's 90-day volume weighted average price
Shares of Summit Materials Inc. ($SUM) dipped more than 1.7% on Monday (11:41 a.m. ET) after the company confirmed its reported acquisition by concrete maker Quickrete for $11.5 billion, pushing down retail sentiment.
Quickrete’s all-cash offer of $52.50 per share has been challenged by at least two law firms representing shareholders. However, Summit’s largest shareholder, Cementos Argos, has committed to vote in favor of the deal.
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Quikrete has also obtained commitment letters for the financing necessary to complete the deal, which is not subject to a financing condition, according to a company statement confirming the transaction.
The transaction price represents a 36% premium to Summit's 90-day volume weighted average price and a 29% premium on its share price as of Oct. 23 when talks of the acquisition first emerged.
The deal is expected to close in the first half of next year. Morgan Stanley and Evercore are acting as financial advisors to Summit, the statement added.
"This combination, and the value it creates, is a testament to our stellar strategic and financial performance, agile operational and commercial execution, and to the strength and talent of our entire team who have delivered a 34.6% annualized return since we began to develop our Elevate strategy on September 1, 2020," Anne Noonan, Summit Materials president and CEO said.
Retail sentiment on the stock has turned ‘neutral’ from ‘extremely bullish’ a month ago. Message volumes inched down to the ‘high’ zone from ‘extremely high’ in the same period.
The deal will combine Summit's aggregates, cement and ready-mix concrete businesses with Quikrete's concrete and cement-based products.
Summit Materials’ stock is up 32.6% year-to-date.
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