M&R shareholders advised to reject higher Aton offer

THE INDEPENDENT board of listed engineering and construction group Murray & Roberts (M&R) has recommended that its shareholders not accept the increased mandatory cash offer for the group from German family-owned investment holding firm Aton.

M&R said in a circular yesterday that Aton’s increased cash offer price of R17 a M&R share from R15 a share remained below the independent board’s view of a fair-value price range for control of the group of between R20 to R22 a share.

The group said the increased price was also below the trading price of M&R shares on the JSE on Friday, which closed at R17.51 a share and had traded as high as R19.19 a share on June 4.

M&R said the independent board, supported by the updated independent expert opinion, was of the view that the Aton mandatory offer continued to undervalue the strategic platforms and business prospects of M&R, because it was below the fair value range.

Uptake It said the independent board’s circular responding to Aton’s offer, including the updated opinion of the independent expert, was posted to shareholders yesterday.

Meanwhile, listed construction and engineering group Aveng, which is the target of a potential takeover by M&R in an all-share transaction, has raised R493.2 million through a rights offer. This represents a 98.6 percent rights offer uptake by shareholders.

Aveng, which is the target of a potential takeover by M&R, has raised R493 million through a rights offer.

Aveng planned to raise a maximum of R500m in the rights offer, which closed at noon on Friday.

The group said yesterday that the successful rights offer significantly improved Aveng’s liquidity and financial position.

The proceeds of the rights offer would be used to fund Aveng’s internal liquidity requirements.

Aveng, which planned to proceed with the early redemption of a R2 billion bond due for repayment in July next year, reduced the size of the planned rights offer after it reached agreement in principle with M&R about the proposed acquisition of Aveng by M&R. In terms of that proposed transaction, M&R would provide Aveng financing facilities of R1.8bn.

M&R has not yet made a formal offer for Aveng.

Aton, which owns about 44 percent of M&R’s shareholding, previously said it was not supportive of M&R’s proposed acquisition of Aveng, claiming the transaction’s “sole intent appears to be to frustrate Aton’s compelling proposition to M&R shareholders”.

The Aveng rights offer comprised an offer of five billion new ordinary Aveng shares in the ratio of 1 199.98772 rights offer shares for every 100 ordinary Aveng shares held on the record date at a subscription price of 10c a rights offer share.

Following the rights offer, there will be a total of 5.3 billion Aveng shares in issue, including treasury shares.

Aveng shares dropped 14.29 percent on the JSE yesterday to close at R0.12.

M&R ended the day 0.91 percent lower at R17.35.