Will Martin Marietta ever succeed in taking over Vulcan?

By |  June 1, 2012

It’s the question that’s had the aggregates industry, as well as the financial analysts and law specialists following Martin Marietta Materials Inc. and Vulcan Materials Co., on hold since the two companies entered friendly merger talks back in 2010. Following Martin Marietta’s lost appeal Thursday, when the Delaware Supreme Court upheld a one-month-old Delaware Court of Chancery ruling that blocked Martin Marietta’s hostile bid and proxy contest for four months, a merger apparently will not be taking place anytime soon.

According to The Wall Street Journal, the four-month delay means Martin Marietta will need two more annual meetings – or two years –to gain a majority of directors friendly to its takeover effort elected to Vulcan’s board. The board’s terms are staggered.

Even before Thursday’s ruling, stock analyst and law specialist doubts were mounting that the court would rule in Martin Marietta’s favor. Now that Martin Marietta has lost on appeal, analysts like Garik Shmois do not expect the company to push forward in its bid to take over Vulcan Materials.

“If the Supreme Court doesn’t rule in Martin Marietta’s favor … I would have a hard time thinking Martin Marietta would pursue the bid,” Shmois, a stock analyst with Longbow Research, told Reuters before Thursday’s ruling.

Still, the fact that Vulcan Materials is now being pressed from within to merge, in the form of a lawsuit by the company’s founding family, should give Martin Marietta the added fuel it needs to continue its pursuit. Glenn and William Ireland are suing the Vulcan Materials board and company CEO Don James not only for rejecting Martin Marietta’s $4.7 billion offer, but for making a series of “disastrous, poorly vetted decisions,” loading the company with debt and tremendously diminishing the company’s value.

Yes, just when the Martin Marietta-Vulcan Materials saga seemed to be nearing a conclusion, it appears the mega-producers are venturing into a new beginning. So stay tuned.

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