Germans get all sniffy about M and R tie-up with Aveng
Aton, with a bid on the table for Murray & Roberts, is not hot on idea of SA construction groups joining forces
Aton, the German conglomerate bidding for control of Murray & Roberts (M&R), has signalled the JSE-listed company will have a tough time convincing it of the merits of a tie-up with Aveng.
On Thursday Aton said it is “steadfastly against a transaction” between M&R and Aveng, stressing that the proposed tie-up “would impose a significant and unpredictable risk to M&R”. It pointed out that Aveng had reported losses of R6.7-billion in financial 2017.
Aton was responding to a SENS announcement released by M&R on Thursday morning stating that it continued to believe in the strategic and financial merits of the proposed transaction for the shareholders of M&R and Aton.
“Murray & Roberts and Aton have agreed to meet in order to discuss the merits of the potential transaction, with the aim to procure Aton’s support,” said M&R.The M&R share price shot up to more than R18 on Thursday, comfortably above Aton’s revised offer of R17 a share. It closed 3.71% higher at R18.18, bringing this year’s gains to just over 50%.
On Thursday Aton said it would not comment on any communication with M&R but continued to express its opposition to the proposed Aveng deal. It said it believed the deal would distract M&R from focusing on growth opportunities in mining. The transaction directly conflicts with M&R’s strategy, which has seen it exit its own construction and manufacturing businesses in recent years, said Aton.
“Only the Aveng bondholders and to some degree its shareholders would benefit from this transaction,” said Aton.
The fractious bid for control has set a number of precedents for the South African takeover authorities who have ordered M&R CEO Henry Laas to refrain from making any public statements concerning the offer.
The Takeover Regulation Panel has not given M&R the approval required to put the proposed Aveng transaction to its shareholders. In an unprecedented move it has said it will consider M&R’s request for approval in terms of section 126 of the Companies Act after M&R shareholders have voted on the Aveng deal at a meeting scheduled for June 19.
Section 126 of the Act deals with restrictions on frustrating action by a company that has received a takeover offer. The vote at the meeting, which will require approval by 50%-plus-one share, will give shareholders an opportunity to declare whether or not they believe the transaction represents a “frustrating action” by the M&R board.
The TRP will also review representations made to it by M&R shareholders before considering M&R’s request for approval.