Mergers and Acquisitions
During a hostile bid for a construction materials group with businesses in the U K, France, and Spain it was necessary to track down the details of one of the many previous group company acquisitions in France. Mineral reserves that had been stated in a family business sand and gravel site portfolio didnt quite stack up. The Due Diligence team in Paris though was very busy trying to verify the assets on hundreds of other sites so a way had to be found of rapidly determining if the assets of that family company had been properly assessed or whether a lower valuation should be attached to that part of the group.
Luckily the French authorities keep very detailed records of land ownership in each commune Mayors office the Mairie where every individual parcelle of land and the ownership is listed. At Department level a register is kept of all mineral planning permissions granted and the tonnes of mineral included in the planning permission. Since the family company had only operated in 2 Department it was a simple matter to add up the total amount of sand and gravel that had ever been permitted, reduce it by an estimate of the amount that would have been sold, and compare that to the current stated estimate. This simple analysis threw up inconsistencies so some more detailed checking was going to be worthwhile.
The French Due Diligence became the high profile turning point of the bid and the evidence uncovered allowed the bidder to resist increasing the initial cost per share offer.
