Money Magazine Australia

MACMAHON HOLDINGS

- By Gaurav Sodhi, Intelligen­t Investor the offer unless a rival bid is made. Macmahon is a fragile business in a volatile industry. It’s probably not worth risking a large fall for a slight gain, especially when the share price matches the offer price.

CIMIC, formerly Leighton Holdings, has made a takeover offer for Macmahon Holdings, offering 14.5¢ in an unconditio­nal bid. That’s a 30% premium to Macmahon’s previous traded price and values the business at $170 million, a near 20% discount to the company’s net tangible assets.

We might expect such a modest bid to be met with resistance or a rival bidder but this might be an exception. Still recovering from near collapse, Macmahon has been through several managers. The

board has advised investors to do nothing but it could make sense to sell while commodity prices are high. As CIMIC already has a 20% equity stake in the business, a rival bidder is unlikely. CIMIC itself cannot increase

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