Break-up looms as white knights desert Redland

The chances of a white knight bid for Redland, the building materials company under siege from French group Lafarge, are looking more remote after some of the industry's biggest players indicated yesterday that they were not interested in buying the whole company. Though it is early days, Redland's best defence may be to break itself up, writes Sameena Ahmad.

Investors in Redland expecting a white knight to counter Lafarge's pounds 1.7bn hostile offer, made on Monday, for the roofing and aggregates company, may be disappointed after comments yesterday from some heavyweight players in the building industry.

A source at Tarmac, the UK's largest aggregates company, said yesterday that it was "pretty unlikely" that the company would bid for any of Redland. "It is hard to see us as a contender," said the source.

Analysts said that Tarmac would probably have to issue paper to buy Redland's UK and US aggregates business, valued at around pounds 1bn. The company has high net debt and is still working through last year's asset swap with Wimpey.

RMC said yesterday that it had an "open mind" about Redland's aggregates business and was watching the situation "closely."

However a source at the company indicated that RBB, Redland's roofing business was not a consideration: "I doubt if we will extend in that direction. We already have our hands full."

Pioneer, the Australian building materials group also appears to have ruled out a full bid. Though the group has a roofing business in Australia and the USA and said that its strong balance sheet could fund expansion, Pioneer yesterday said that it did not consider roofing as its core business and that the German shareholding in RBB, 43.5 per cent owned by Braas, could be a problem.

"That is another element in the attractiveness or unattractiveness of Redland," said an insider.

Hanson is also believed to have ruled itself out as a full bidder. Blue Circle, the cement company whose name has also cropped up as a potential bidder is thought to feel that buying Redland, its customer, would alienate other cement users like Tarmac. Lafarge has two weeks from Monday to post its offer document.