Tables turning on quarry predator

A BIG shake-up of the quarry industry is possible in the coming weeks after aggregates group Ennstone launched a bid for a smaller rival - and became a target itself.

The company's £48.3m bid for Johnston Group has been attacked by two of its shareholders, but analysts believe a third - Aggregate Industries, which has a 7.2%stake - might be planning a bid for Ennstone.

In a separate twist, Johnston's, 25% shareholder, Tarmac - part of mining giant Anglo American - has asked the Office of Fair Trading to allow it to increase its stake, prompting speculation that it might bid for Johnston.

Tarmac acquired the stake in 2002 but market share restrictions mean it has to ask the OFT for permission to raise it. A ruling is expected next month.

Ennstone chairman Vaughan McLeod said: 'I have heard from reliable sources that someone out there wants to bid for us. They should stand up and be counted.'

Ennstone, which supplied the granite for the Princess Diana memorial fountain in London's Hyde Park, launched its offer for Johnston last month, since when Johnston has been approached by other potential bidders. Ennstone has the backing of the Johnston family, who own 51%.

McLeod wants his shareholders to approve the deal at a meeting on 1 September, but investment funds North Atlantic Value and Mirabaud, which speak for 16% of the votes, have called a meeting to appoint a non-executive director and launch a strategic review. Ennstone has scheduled the rebels' meeting to follow the vote over Johnston.

Stephen Rawlinson, an analyst with broker Arbuthnot, said Ennstone's bid could spark sector consolidation.