Aecon shares skyrocket as it confirms potential sale

NEW YORK Canadian construction company Aecon Group Inc. confirmed Friday as its shares skyrocketed that it has hired advisers to explore a potential sale.

Aecon, which helped build Toronto’s CN Tower, is working with Toronto-Dominion Bank and Bank of Montreal on the sales process.

Trading of the company’s shares was temporarily halted Friday after news of the potential sale. After rising more than 26 per cent, its shares ended that day up 20.29 per cent to $17.25 in Toronto, giving the company a market value of more than $1 billion.

The company could attract interest from Chinese bidders, said people familiar with the matter who asked not to be identified because it’s private.

“Any transaction would be intended to create shareholder value and enhance the company’s capabilities and growth potential,” Aecon said in a statement. “There can be no assurance that this process will result in any agreement or that a transaction will be consummated.”

Shares of Aecon had fallen 23 per cent in the past year through Thursday. The company could be worth about $24.96 a share in a takeover based on recent transactions in the sector, Maxim Sytchev, a Toronto-based analyst with National Bank Financial, wrote in a June 4 note to clients. That would provide a 74 per cent premium to Aecon’s closing price Thursday.

Activist investor Eric Rosenfeld of New York-based Crescendo Partners was nominated to Aecon’s board in June. Rosenfeld held 214,000 shares as of July 7, according to data compiled by Bloomberg.

Aecon has been without a permanent chief executive since November, when executive chairman and founder John Beck replaced Terrance McKibbon on an interim basis. The company said in July it’s still searching for a CEO.

Beck said on a conference call last month that Aecon, despite its share slump at the time, was well positioned to benefit from the new $35 billion Canada Infrastructure Bank. The bank was launched by the federal government to help develop Canadian infrastructure projects.

Aecon operates companies across the mining, infrastructure, energy and services industries, building projects from factories, roads and sewers to theatres.