Battle for control of M&R resumes
JSE-listed engineering firm seeks to block shareholder Aton from exercising all its votes
The battle for control of Murray & Roberts (M&R) has resumed, with the embattled JSE-listed company once more trying to prevent long-term suitor Aton from exercising all of its votes at the engineering group’s coming shareholders’ meeting.
The battle for control of Murray & Roberts has resumed, with the JSE-listed firm once more trying to prevent long-term suitor Aton from exercising all of its votes at the engineering group’s upcoming shareholders’ meeting.
Aton has slammed the move and said it is no better than an earlier approach to the Competition Tribunal to prevent Aton voting at a general shareholders’ meeting in June.
Murray & Roberts, which is headed by Henry Laas, wants the Competition Appeal Court to prevent German group Aton from voting all of its Murray & Roberts shares equivalent to 44% of the total at the upcoming Murray & Roberts annual general meeting (AGM), claiming that if it did vote, Aton would be able to exercise control over the meeting and therefore over Murray & Roberts.
Such control would be a contravention of the Competition Act, claims Murray & Roberts, as Aton has not yet received approval for the deal from the competition authorities.
Aton has dismissed the claim, saying the recent attendance at Murray & Roberts shareholder meetings shows that 44% would not be sufficient to sway the outcome of the AGM. It has undertaken to restrict its voting to 50% less one at the November 2 meeting.
Murray & Roberts’ approach to the Competition Appeal Court at the end of September was the latest move in a hostile bid for control of what was once one of SA’s most powerful construction firms. To date, the battle for control, which was formally launched in April, has seen an unprecedented involvement by both the takeover and competition authorities.
The privately owned German firm, which had bought an initial stake in Murray & Roberts in 2015, made an offer for control to Murray & Roberts shareholders in April 2018. At the time, it had a stake of 29.99%. By early June, Aton had increased its holding to 44%.
In an unexpected move in May, Murray & Roberts’ independent board, which opposed the R17-a-share offer from Aton and had advised shareholders to reject it, announced it had reached an “in principle” agreement with construction firm Aveng regarding a proposed tieup. Aton said at the time that Murray & Roberts’ “sole intent appears to be to frustrate Aton’s compelling proposition to Murray & Roberts’ shareholders”.
A shareholders meeting was called for June 19 to give shareholders an opportunity to vote on whether or not the Murray & Roberts board should proceed with the Aveng deal.
In early June, Murray & Roberts asked the Competition Tribunal to prevent Aton from voting more than 29% at the upcoming shareholders’ meeting to ensure it did not control the outcome of the meeting.
Murray & Roberts argued that voting the shares it acquired after making its formal offer was tantamount to prior implementation of a merger, in contravention of the Competition Act.
In a bid to ensure it could not control the outcome of the meeting, the tribunal ruled that Aton could vote the equivalent of 50% less one share. The tribunal ruling was unnecessary as a remarkably high turnout saw 52% of shareholders vote in support of the Murray & Roberts board’s Aveng proposal on June 19 against Aton’s 44%.
Aton told the Competition Appeal Court last month it remains the case that its 44% does not give it voting control.
It said that five institutional shareholders — the Public Investment Corporation, Dimensional Fund Advisors, Allan Gray, Old Mutual and Vanguard — hold a combined 38.5%, and various empowerment and incentive trusts hold 11.1%.
Murray & Roberts and Aton declined to comment on the latest outbreak of hostilities in this long, drawn-out battle.