M&R to chase deal

A majority of 52.06% of Murray & Roberts (M&R) shareholders gave the green light for the company’s board to pursue the merger with embattled competitor Aveng.

This came despite strong opposition from M&R’s suitor and 44% shareholder, the German group Aton.

M&R chief executive Henry Laas emphasised the shareholders have not yet approved the actual merger with Aveng, but merely gave the board the mandate to continue developing the deal.

At the start of the meeting, Sean Chilvers, representing Aton, repeated the group’s position that the Aveng deal would only benefit Aveng’s bond holders and holds considerable risk for M&R shareholders.

Chilvers said the transaction would expose M&R to debt and could result in a high risk of near-term capital rising.

He said it was a reversal of M&R’s strategy to exit the local construction market and there was no guarantee that M&R would be successful in selling assets, like the local construction business, Grinaker LTA, since Aveng has been unable to do so.

After the meeting, Laas welcomed the exercise of shareholder democracy. He said the vote was necessary in terms of provisions of the Companies Act that apply in light of Aton’s offer to take over all the shares in M&R.

The Aveng transaction was in the making before Aton made its move and would only amount to frustrating action, as Aton accused M&R of, in the absence of approval of shareholders and the TakeOver Regulation Panel.

M&R had already started with the due diligence process.

The company was interested in Aveng’s opencast mining business, Moolmans.

The other jewel in Aveng’s crown is the Australia-based McConnell Dowell, which would fit in well with M&R’s Glough.

M&R hopes to table a proposed offer to shareholders by the end of August.