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Monday, 8 January, 2001, 08:46 GMT
Lafarge to buy Blue Circle
Labourer on a building site
Lafarge tried and failed with a hostile bid last year
The French building materials group Lafarge is set to buy the UK cement firm Blue Circle for 3.1bn.

The bid price means shareholders - if they accept it - would get 8% more for their shares than their value at the close of business on Friday.

The French firm's hostile takeover attempt failed last year. The current friendly offer is 13% higher.

Lafarge already owns 22.6% of Blue Circle as a result of its earlier bid and its financial adviser, Dresdner Kleinwort Benson has a further 9.8%.

Last month Lafarge chief Bertrand Collomb said the French group would seize any opportunity to pursue a purchase of the rest of the company.

Trapped

After failing in its earlier takeover attempt but still left with a substantial stake, Lafarge was effectively trapped.

The stake was too large to sell - the market would not have been able to absorb it - and yet Lafarge had little influence in the company.

After fending off Lafarge, Blue Circle initiated a rationalisation programme, selling a 50% stake in a Danish business, cutting 350 jobs from its UK workforce and agreeing a new, cost-saving deal with a fuel supplier.

It also attempted to dilute the French firm's stake and entered talks - although they ultimately came to nothing - with US cement maker Southdown.

Last month, Blue Circle's shares rose strongly after an upbeat trading statement that said more scope to cut costs had been found than previously expected.

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See also:

11 Sep 00 | Business
Cement giant 'open to offers'
22 May 00 | Business
Blue Circle in merger talks
04 May 00 | Business
Bid for Blue Circle fails
19 Apr 00 | Business
Blue Circle rejects raised bid
11 Apr 00 | Business
Blue Circle's 800m defence
28 Oct 99 | The Company File
Warning hits Blue Circle shares
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