Murray & Roberts advises shareholders to reject takeover offer

An independent board of Murray & Roberts says it will not support the buyout of shareholders by a German investment holdings company.
An independent board of Murray & Roberts says it will not support the buyout of shareholders by a German investment holdings company.

Cape Town - An independent board of Murray & Roberts' [JSE:MUR] has said it will not support the buyout of shareholders by German investment holdings company Aton GmbH.

On Monday shares in the SA engineering and mining contractor jumped by 47% after news of Aton’s proposed takeover bid was made public. 

Aton, which currently owns just under 30% of the group’s shares, was proposing to buy all the group’s issued share capital. 

But on Tuesday, in a shareholder’s announcement, an independent board said it viewed Aton’s offer as “opportunistic” and recommended that its shareholders take no action. 

The board was constituted according to the Companies Act to review the offer. It comprised independent non-executive directors Suresh Kana, Ralph Havenstein, Alex Maditsi and Diane Radley. 

“The offer is opportunistic and made at a time of unprecedented share price weakness as a consequence of low liquidity, declining valuations of its legacy peers in the construction sector and halting of the company’s share buy-back programme in 2017,” Murray & Roberts said in a statement on Tuesday afternoon. 

“Accordingly, the independent board advises that it will be recommending to Murray & Roberts’ shareholders to not accept the offer, when made. No further action should be taken by Murray & Roberts’ shareholders in connection with the offer.”

True value 

In its statement, Murray & Roberts said the cash offer price of R15.00 per Murray & Roberts share “materially undervalues the company based on its prospects”. 

The group’s share price fell by about 4% after the independent board’s rejection was made public. At 14:16 its shares were trading at R13.45, down 4.13% on the day. 

It also said it was not clear how Aton would manage the dilution of Murray & Roberts’ B-BBEE
ownership credentials if it wanted to buy all its issued share capital. 

Aton did not immediately reply to a Fin24 request for comment. 

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