KARACHI - After a pause, the recent announcement by Pioneer Cement (PIOC) seems to suggest a rising trend of Merger and Acquisition (M&A) activities, The Nation has learnt. Most importantly, this is a welcoming development for both equity markets and the overall economy, while this should trigger more M&A deals in the sector itself, as majority of the companies are still struggling to return to normal profits. It is further learnt that over 50pc of the cement cos have recorded losses in nine months of FY09, despite 833pc YoY earning growth reported by the sector in 9MFY09. However, there remain question marks over the viability of acquisition of 25pc stake of PIOC at Rs22/share since many quality cement companies, such as DG Khan Cement, Lucky Cement and MLCF, are trading at far more attractive multiples. Though a strategic stake demands a degree of premium, experts believe on comparative analysis the Rs22 target price seems to be on the higher side as significant blocks of quality companies are available at more attractive prices. Moreover, despite detailed research, lack of information availability on the acquirer Vision Holdings also makes analysts skeptical on deals materialisation. Vision Holdings Middle East Limited (VHMEL), in a notice issued to the KSE, announced that they have acquired substantial 24.6pc (49m shares) of the shareholding in Pioneer Cement (PIOC). Purchase price has been determined at Rs22 per share, however subject to downward adjustment following completion of due diligence exercise, which will be conducted over the next 4 months. Moreover, VHMEL has also entered into a Call and Put option agreement with approximately 28.95pc other shareholders. Resultantly, VHMEL may at any time require such shareholders to sell their stake in PIOC to VHMEL during a period of 18 months at the final price determined after the due diligence exercise. If the call is not exercised and subsequently expires, then such shareholders will have the right to exercise the put option which will require VHMEL to acquire their shareholding in PIOC at the final price determined. PIOC current book value stands at Rs22.57 per share inclusive of revaluation surplus and Rs11.50 otherwise. Analysts at JS research believe Rs22 per share purchase price is on higher side, given that quality stocks within cement sector are available at bargain and at cheaper valuation on the street.