THE BOTTOM LINE
Aveng shares leap 41% on proposed takeover ruling
Murray & Roberts cleared to proceed with its buyout of Aveng by the Takeover Regulation Panel
Aveng shareholders and bondholders were the major beneficiaries of the Takeover Regulation Panel (TRP) ruling that Murray & Roberts (M&R) could proceed with its proposed takeover of Aveng.
As soon as news of the TRP decision reached the market the Aveng share price started to pick itself up off the floor. By the close of trade on Thursday it had reached a relatively healthy 24c.It might be down to hometown advantage but right now it does look as though the guys at M&R have outmaneuvered German takeover hopefuls Aton at almost every step. It is of course still early days in the war for control of M&R but unless peace breaks out it is likely there will be more drama with the competition authorities as well as the TRP.
While the Competition Tribunal ruling restricting Aton’s vote to 50% less one share turned out to be irrelevant on the day it has proved one thing – that even with 44% Aton does not have control of M&R.
Given M&R’s tactical successes to date and the fact that Aton has been forced to upgrade its voluntary offer to a mandatory one, the prospect of peace is likely to come with a price tag. Presumably it was this prospect that secured the necessary support for the M&R board at Tuesday’s shareholder meeting.
It is possible that some shareholders agree with the board’s view that although fair, Aton’s offer is unreasonable. They may believe that after several years of hardship and restructuring M&R is now poised for earnings growth. If Aton is not prepared to lift its offer then the drama looks set to continue.