The Germans are coming! The Germans are coming! Or not

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THE BOTTOM LINE

The Germans are coming! The Germans are coming! Or not

Murray & Roberts merger with Aton hinges on whether the German group will up its offer from R17 to R20

Ann Crotty

The Murray & Roberts (M&R) share price has been reasonably stable since the dramatic outcome of the mid-June shareholders’ meeting held to decide on the proposed takeover of Aveng.
At around R17.40 the share price is just a tad above the R17 offer from German industrial group Aton. This suggests investors do not believe Aton will be persuaded to increase the offer, which M&R has dismissed as reasonable but not fair.In the response circular released on Monday the independent board of M&R repeated its view that the fair value price range for control of the group is between R20 and R22. That might be “fair” in terms of securing control but it’s been three and a half long years since M&R shareholders have seen their shares trade at that sort of level.
Having overseen the evaporation of a massive chunk of the group’s value in recent years, the M&R board is working hard to ensure shareholders get the best possible deal from the Germans. So far they have outmaneuvered the Aton team and are sticking to their commendably solid advice to shareholders, which is if they’re not sure what to do, do nothing, for now.
The M&R independent board has told shareholders that if the Aton offer is declared unconditional then at that stage they will have 10 business days to decide what to do.
There could be a long wait. Aton has tagged March 2019 but this could be pushed out if there are problems with any of the conditions attached to the merger’s approval. Aton could abandon the offer if it’s not happy with the conditions.
Obviously M&R believes that with 44% in the bag, Aton will stick it out to the bitter end and negotiate its way through the conditions. It could also just sit with the 44%.

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