Aton in last chance bid for M&R

Afro Voice (Northern Cape) - - BUSINESS - busi­ness@the­

GER­MANY’S Aton, a pri­vate in­vest­ment hold­ing com­pany which is in­ter­ested in buy­ing out SA gi­ant con­struc­tion com­pany Mur­ray & Roberts for $600m (R7bn) will have to wait un­til next week Thurs­day for share­hold­ers to de­cide on the of­fer.

Re­cently the group made a ma­jor black eco­nomic em­pow­er­ment trans­ac­tion of sell­ing 100% of its con­struc­tion and civil en­gi­neer­ing busi­ness to a black-owned con­sor­tium led by the South­ern Palace Group.

Aton which al­ready owns a third of M&R, of­fered to buy the rest of M&R’s shares from share­hold­ers at a cash of­fer price of R15 a share, a 56% pre­mium to M&R’s clos­ing price last Thurs­day.

But M&R re­jected the of­fer of R15 a share, say­ing that it un­der val­ued the com­pany.

“Now Aton has the last chance of launch­ing an of­fi­cial of­fer to share­hold­ers next week Thurs­day and is up to share­hold­ers to de­cide.

“The of­fer will re­main open for 30 day busi­ness whether share­hold­ers sup­port it or not,” Ed Jardin, M&R spokesper­son, said.

Fur­ther, M&R’s in­de­pen­dent board said the low of­fer price, in con­junc­tion with the risks pre­sented in ex­e­cu­tion, make the of­fer “par­tic­u­larly unattrac­tive” for its share­hold­ers.

“The of­fer is op­por­tunis­tic and made at a time of un­prece­dented share price weak­ness as a con­se­quence of low liq­uid­ity, de­clin­ing val­u­a­tions of its legacy peers in the con­struc­tion sec­tor and halt­ing of the com­pany’s share buy-back pro­gramme in 2017,” M&R’s in­de­pen­dent board said.

The Mur­ray & Roberts board said it would rec­om­mend that its share­hold­ers re­ject the of­fer, once it ess for­mally made to them.

Aton plans to post an of­fer cir­cu­lar to M&R’s share­hold­ers on April 5, say­ing it has the back­ing of M&R’s third largest share­holder, Allan Gray, whose stake is around 11% .

Shares in M&R fell more than 6% af­ter the com­pany re­leased its state­ment be­fore trim­ming losses to trade 5.42% weaker to R13.27.

South Africa’s con­struc­tion in­dus­try has slowed sharply since the 2010 Fifa World Cup, with few ma­jor in­fra­struc­ture projects awarded and those that have been ap­proved risk be­ing cur­tailed by fis­cal strains.

Seven con­struc­tion com­pa­nies were to make fi­nan­cial con­tri­bu­tions of R1.5bn for de­vel­op­men­tal projects for col­lud­ing in 2010.

How­ever, Jardin said the deal had noth­ing to do with 100% of its con­struc­tion and civil en­gi­neer­ing busi­ness sold to a black-owned con­sor­tium, but is the is­sue fac­ing M&R as it is still owns large por­tion of the firm listed on the JSE. – with Reuters


WORK IN PROGRESS: Ger­man in­vestor Aton will press on in its ap­petite to snap up SA en­gi­neer­ing firm Mur­ray & Roberts.

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