CIMIC eyes takeover of Macmahon
Contracting giant CIMIC has lobbed a takeover bid for Macmahon Holdings, offering 14.5¢ a share to mop up the 80 per cent of the company it does not already own.
CIMIC holds 20.5 per cent of Macmahon shares and its offer values the company at $175 million.
The offer is a 32 per cent premium to Macmahon’s 11¢ closing price yesterday, and the struggling contractor has not traded above the offer level since a brief spike above 15¢ in August.
CIMIC said last week its off-market bid was unconditional, and the company had also appointed Credit Suisse to buy Macmahon shares on-market at the offer price.
Macmahon said in a statement last Tuesday its board was considering a response to the CIMIC offer, and recommended that shareholders take no action until its board had had time to release a formal recommendation on the bid.
CIMIC’s move on Macmahon is the latest in a slew of hostile bids launched to mop up its minority interests in other contractors since Spanish giant ACL took control of the company, then known as Leighton Holdings, in early 2014.
CIMIC handed the Macmahon board a so-called second strike at last year’s annual general meeting by voting against its remuneration report, and also voted again the reelection of chairman Jim Walker.
The mandatory vote to spill the WA contractor’s board was easily defeated at the November meeting, however.
CIMIC’s approach to Macmahon mirrors its move on listed engineering company Sedgman.
In 2015 CIMIC ambushed the Sedgman board at its annual shareholder meeting, using its 37 per cent holding to dump three independent directors in a shareholder poll, and demanded direct representation on the Sedgman board.
Two months later, CIMIC launched a hostile takeover for the contractor.
Since then, CIMIC has closed a hostile bid for UGL, which was recommended by the company’s board.
CIMIC said it had received Foreign Investment Review Board approval for the Macmahon tilt, and that the Australian Competition and Consumer Commission had indicated it would not intervene in the bid.
Macmahon has said its board its considering a response to the CIMIC offer.