Aton digs in its heels on Aveng

Aton, the German conglomerate bidding for control of Murray & Roberts, has signalled that the JSE-listed company will have a tough time convincing it of the merits of a tie-up with Aveng.

Aton, the German conglomerate bidding for control of Murray & Roberts (M&R), has signalled the JSE-listed company will have a tough time convincing it of the merits of a tie-up with Aveng.

Aton said on Thursday it was “steadfastly against a transaction” between M&R and Aveng, stressing that the proposed tie-up “would impose a significant and unpredictable risk to M&R”. It pointed out that Aveng had reported losses of R6.7bn in financial 2017.

Aton was responding to a Sens announcement by M&R stating that it continued to believe in the strategic and financial merits of the proposed transaction for the shareholders of M&R and Aton. “Murray & Roberts and Aton have agreed to meet in order to discuss the merits of the potential transaction, with the aim to procure Aton’s support,” said M&R.

The M&R share price shot up to more than R18 on Thursday, comfortably more than Aton’s revised offer of R17 a share. It closed 3.71% higher at R18.18, bringing gains in 2018 to just more than 50%.

Aton said it would not comment on any communication with M&R but continued to express its opposition to the proposed Aveng deal. It said it believed the deal would distract M&R from focusing on growth opportunities in mining.

The transaction conflicts with M&R’s strategy, in terms of which it has exited its own construction and manufacturing businesses in recent years, said Aton. “Only the Aveng bondholders and to some degree its shareholders would benefit from this transaction,” said Aton.

The fractious bid for control has set a number of precedents for South African takeover authorities who have ordered M&R CEO Henry Laas to refrain from making any public statements concerning the offer.

The takeover regulation panel has not given M&R the approval required to put the proposed Aveng transaction to its shareholders. It has said it will consider M&R’s request for approval in terms of section 126 of the Companies Act after M&R shareholders have voted on the Aveng deal at a meeting on June 19. Section 126 deals with restrictions on frustrating action by a company that has received a takeover offer.

The vote will give shareholders an opportunity to declare whether they believe the transaction represents a “frustrating action” by the M&R board.