CIMIC faces Macma­hon com­pe­ti­tion

Pilbara News - - News - Nick Evans and Pe­ter Wil­liams

Con­tract­ing gi­ant CIMIC is in a race to secure an­other 17 per cent of Macma­hon Hold­ings, or use a nar­row win­dow to lift its 14.5¢ bid for the com­pany, to beat the risk of be­ing washed back down Macma­hon’s reg­is­ter.

Macma­hon last week de­liv­ered on its prom­ise to find a white knight to save it from CIMIC’s 14.5¢-a-share takeover of­fer, an­nounc­ing a non-bind­ing deal with In­done­sia’s PT Am­man Min­eral Nusa Teng­gara for a life-of-mine con­tract at the gi­ant Batu Hi­jau cop­per/gold mine.

If con­sum­mated, the agree­ment could see AMNT emerge with up to a half-own­er­ship in Macma­hon un­der a scrip-for-kit swap that would see the WA con­trac­tor take con­trol of the project’s min­ing fleet.

A con­di­tion of the pro­posed deal is that CIMIC must not cap­ture more than a 40 per cent hold­ing in Macma­hon be­fore it is for­malised, leav­ing the Span­ish-con­trolled con­trac­tor on a tight time frame to ex­tend its 23.3 per cent stake in Macma­hon. CIMIC has not yet pro­vided a de­tailed re­sponse to the pro­posed tie-up and it is un­clear whether it will de­cide the agree­ment is a “com­pet­ing pro­posal”, al­low­ing it to lift its of­fer for Macma­hon shares.

That task was made harder by mar­ket re­ac­tion to the deal, as Macma­hon shares closed at 16.5¢ — 2¢ above CIMIC’s of­fer price — af­ter gain­ing 1.5¢ for the day. Un­der the agree­ment with AMNT, Macma­hon would ac­quire equip­ment from AMNT worth about $US150 mil­lion in ex­change for shares, priced at 20.3¢ each.

In ex­change it wins a con­tract worth about $US2.7 bil­lion at the for­mer New­mont op­er­a­tion over 14 years, with $US2 bil­lion in­curred in the five years from next Jan­uary. A for­mal val­u­a­tion will set the fi­nal terms but Macma­hon said last week it ex­pected to is­sue about 960 mil­lion shares to the In­done­sian com­pany, de­liv­er­ing it a stake of 44.4 per cent.

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