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Sunday, October 31, 1999 Published at 17:53 GMT

Business: The Company File

Anglo American is Tarmac bidder

Tarmac could be on the road to a takeover

South African mining firm Anglo American has emerged as the mystery £1bn bidder for aggregates group Tarmac.

The company, which listed on the London Stock Exchange in May, launched a 535p cash offer which was rejected by the Tarmac board on Friday. This followed an offer of 500p which was rejected earlier in the week.

Tarmac revealed the news of an approach after its shares jumped 10%. Following the announcement, its shares surged 45% on the week to close at 512.5p on Friday.

The Leicestershire-based firm said the offer undervalued its business and future prospects. Chief executive Roy Harrison said: "We want to be involved in the industry consolidation from a position of strength. We don't want to be picked off."

Tarmac's major shareholder, Phillips & Drew Fund Management (PDFM), is believed to have backed the rejection.

Anglo chairman Julian Ogilvie Thompson recently said that he had a war chest of £3bn for acquisitions. Anglo may now hold talks directly with PDFM, which owns 19% of the company.

If its takeover attempts succeed, it would become one of the world's biggest building materials companies.

Anglo would merge Tarmac with its Tilcon building materials operation.

Anglo has reportedly retained advisor Warburg Dillon Read to help in its takeover campaign.

Tarmac earlier this year split off its construction arm into a separate company called Carillion.

Last month Tarmac bought up key assets of Marley Paving for £26m to set up a separate division called Tarmac TopPave.

And this month it bought London-based asphalt business Situsec for £9.45m.

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