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Following German company Aton’s attempt to buy out all Murray & Roberts shareholders for R15 per share, an independent board has recommended that shareholders reject the offer. The independent board was established by Murray & Roberts directors, with BDO SA Services appointed as an independent expert.

Murray Roberts to reject buyout bidThe board said it found the offer “opportunistic” and “made at a time of unprecedented share price weakness”. “The offer price materially undervalues the company based on its prospects,” it said in a statement.

Should the bid have succeeded, it was expected that Aton would buy up 100% of Murray & Roberts and delist it from the JSE, or that it would buy 50% plus one share to become the majority stakeholder, or accrete shares to below a 50% stake. “Scenarios where Aton accretes its shareholding but does not delist Murray & Roberts presents risks to Murray & Roberts’ shareholders and Aton, including conflicts of interest, strategic misalignment and reduced strategic flexibility and potentially casts the company adrift into a protracted period of uncertainty as Aton gradually increases its shareholding and attempts occasionally to delist the company,” the board said.

Aton has yet to make an official offer, with the company due to post a circular to shareholders this week. The circular is expected to state that Aton has the backing of Allan Gray, Murray & Roberts’ third largest shareholder.

Aton has said it believes a successful offer would have a positive effect on Murray & Roberts’s stakeholders, including management and staff, as well as the South African economy. “The offer is attractive given the uncertain outlook in Murray & Roberts’s key markets. The uncertainty is reflected in Murray & Roberts’s order book, which has fallen in each of the financial years since 2015. On completion of the offer, Murray & Roberts’s management and employees will become part of the service-oriented investment portfolio of Aton in Africa, the Americas, Asia and Europe,” an earlier statement said.

Murray & Roberts Group CEO Henry Laas has indicated that Aton’s mining operations overlap in the US, Canada and Indonesia, among others, and would draw in competition authorities if Aton held a majority stake in the company.

Image: http://www.murrob.com/abt-executive-com.asp

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