Aton in last chance bid for M&R
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.