THE BOTTOM LINE
Little chance of more dosh for exasperated shareholders
M&R share price has dipped below the R17 that Aton has offered, so no pressure on Germans to raise their bid
The Murray & Roberts (M&R) share price has dipped below the R17 that Aton has offered shareholders, indicating that shareholders are not holding out much hope that Aton will be pressured into increasing its offer any further.
The two issues that have contributed to the recent price decline are Aton’s rather inspired decision to buy a 25.4% stake in Aveng, enabling it to block the proposed tie-up with M&R, as well as the Takeover Special Committee’s prohibition on that proposed tie-up.
There have been lots of twists and turns in this transaction so it’s tempting fate to suggest that the independent board of M&R have now run out of defence options, but it is difficult to imagine what more they could do to secure the R20-plus they claim M&R is worth.
With enough time and resources the independent board might have been able to put up a reasonably spirited challenge to the Takeover Special Committee’s ruling on the matter. The board evidently wasn’t happy about the ruling but noted it had “resolved not to take the TSC’s decision on review at this time and continues to reserve its rights in this regard”.
It was a rather interesting ruling given that the TSC itself acknowledged that, “there is no evidence upon which the TSC can rely which clearly demonstrates that the potential Aveng transaction was ‘designed’ to frustrate the mandatory offer and should be prevented”.
Having made this critical acknowledgment the TSC then goes on to list a broad range of issues, many of which venture into the “public interest” space, to defend its ruling. It has set a precedent that may be challenged in future transactions. News of the 20%-plus increase in earnings expected for the year to end-June is good news for Aton, if not for all the other M&R shareholders.