PIC ups its stake in M&R to above 20%

THE PUBLIC Investment Corporation (PIC), the second largest shareholder in Murray & Roberts (M&R), has further increased its shareholding in the engineering and construction group.

M&R said yesterday the PIC had acquired an additional beneficial interest in the ordinary shares of the company and had increased the interest it held in M&R to 20.041 percent from 19.96 percent.

The PIC publicly stated its opposition to the hostile takeover offer of the group by German family-owned investment holding firm Aton, M&R’s largest shareholder with an about 44 percent stake.

Aton, on the other hand, opposed M&R’s proposed acquisition of listed construction rival Aveng for R1 billion in an all-share transaction.

Not supportive Deon Botha, the head of corporate affairs at PIC, indicated in April this year that the corporation was not supportive of Aton’s offer for M&R.

“The PIC has noted the R15 per share offer by the German investment company, Aton, to the current M&R shareholders.

“The PIC does not support the current offer and agrees with the Board of M&R that the offer by Aton materially undervalues this successful engineering, construction and mining company based on its prospects.

“Furthermore, the PIC is opposed to the proposed delisting of M&R from the Johannesburg Stock Exchange (JSE) as this will diminish the investible universe on the JSE,” it said.

However, Aton last month further increased its shareholding in M&R for an average consideration of R16.99 and a maximum of R17 a share, which meant in terms of the JSE’s takeover regulations it was required to increase the price of its direct offer to M&R shareholders to R17 a share.

Aton was ordered by the Takeover Special Committee in terms of a ruling released last month to withdraw its current offer to M&R shareholders and to make a mandatory offer to all M&R shareholders.

This decision was prompted by a forward sale agreement concluded between Aton and asset managers Allan Gray, which the committee said fell foul of the provisions of the Companies Act.

Aton subsequently made a mandatory offer to M&R, which the group earlier this month confirmed its independent board was reviewing with its advisers. The PIC’s view on the increased price mandatory offer made by Aton for M&R was not know.

Aton, which had 44.05 percent of M&R’s votable shares, publicly indicated it would vote against the resolution.

At a general meeting of M&R shareholders, 52.06 percent of M&R shareholders voted in favour of the resolution. This meant that other than the shares held by Aton, 99.63 percent voted in favour of the resolution.

M&R shares declined 0.68 percent on the JSE yesterday to close at R17.50.