Orlando, FL 12/12/11 (StreetBeat) -- Construction-materials company Martin Marietta Materials (NYSE:MLM) just announced a hostile takeover attempt for larger rival Vulcan Materials (NYSE:VMC). Martin Marietta said the combined companies would have an enterprise value of $11.4 billion.The stock-for-stock deal values Vulcan Materials stock at $4.7 billion, or $36.69 a share, based on Friday’s closing share prices.
Martin Marietta also said it will maintain its current dividend payout level if it buys Vulcan. Vulcan shares closed trading Friday at $33.55. Shares of Vulcan jumped about 9.6% Monday to $36.76 before they tripped a circuit breaker and were halted. Martin Marietta has a smaller market value than Vulcan– $3.3 billion compared to $4.1 billion.
In a letter released today, Martin Marietta’s CEO said his company and Vulcan had been discussing a deal for more than a year-and-a-half. Vulcan “disengaged” from the deal discussions some months ago, Martin Marietta CEO C. Howard Nye wrote to his Vulcan counterpart. Nye said he is “disappointed that despite these substantial benefits, Vulcan has been unwilling to move ahead towards a definitive agreement.”
Deutsche Bank, J.P. Morgan and Skadden Arps Slate Meagher & Flom LLP are advising Martin Marietta on the deal.
Martin Marietta said in its news release that it also filed lawsuits today “seeking to ensure that Vulcan’s shareholders have the opportunity to directly assess Martin Marietta’s offer.” And if the hostile takeover doesn’t work, Martin Marietta said it plans to seek to replace five members of Vulcan’s board next year.
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