Titan eyes Spanish firm, Latin American market

Cement firm Titan is eyeing a major stake in Spanish cement maker Uniland, a company official said yesterday, in a move seen as a springboard for its expansion into the fast-growing Latin American markets. «We are doing due diligence on Uniland now. There is a lot of interest from other companies, too,» Titan’s investor relations officer Takis Canellopoulos told Reuters. Uniland declined to comment on Titan’s interest in the company. Last month, a source close to the situation said more than 20 candidates had been invited to the 1.5-billion-euro ($1.92 billion) competition to buy 73.7 percent of Uniland. One of two major Greek cement firms, Titan has operations in the United States, Egypt, Bulgaria and the Former Yugoslav Republic of Macedonia as well as Greece. It has repeatedly said it aims to grow internationally through acquisitions and sees foreign operations driving its earnings this year. «At first glance, it looks like an interesting move for Titan as it could introduce the company to the large and healthy Spanish market,» said analyst Constantinos Zouzoulas at Marfin Analysis. A Uniland stake buy could also mark Titan’s entry to new markets such as Argentina, Uruguay and Tunisia, he added. Uniland is 26.3 percent-owned by Irish building materials group CRH Plc. The privately owned Spanish company said in February it was mounting a legal challenge to CRH’s acquisition, saying the shares had been bought unlawfully. CRH, which spent about 300 million euros on the stake in Uniland, has rejected the allegation. Titan could easily fund the Uniland acquisition due to its strong cash flow, Zouzoulas said. «Titan is relatively under-leveraged compared to other large cement producers, while it has a strong cash flow following the conclusion of its large capital expenditure program in late 2004,» he said. Titan trades at 13.06 times 2006 forecast earnings compared with domestic rival Heracles on 13.10 times and CRH’s 12.62 times. (Reuters)