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Murray & Roberts has announced that it is looking at taking over Aveng. No formal offer has been made and the matter will be discussed at a general shareholders meeting on 19 June, the company said in a statement.

Murray Roberts eyes Aveng takeoverAveng has been facing huge debt and liquidity problems and the proposed take-over includes an undertaking to settle R2-billion of Aveng’s debt due in 2019. Murray & Roberts plans to acquire all the issued shares in Aveng, as well as shares still to be issued, for a consideration of R1-billion. This is on condition that Aveng successfully completes its planned rights offer of at least R300 million.  Should the transaction proceed, Murray & Roberts intends to delist Aveng.

According to Murray & Roberts CEO Henry Laas, the company has been evaluating the potential transaction since the fourth quarter of 2017. “The primary objective of the potential transaction is to establish a large multinational engineering and construction group with the scale necessary to compete more effectively in relevant markets. In this context, the Group believes that the strategic rationale for the potential combination of Murray & Roberts and Aveng is compelling for both Murray & Roberts and Aveng stakeholders. The boards of directors of Murray & Roberts and Aveng have agreed to enter into formal negotiations with regards to the potential transaction,” he said.

Murray & Roberts believes this merger would offer value creation for shareholders of both companies by combining and integrating Aveng’s Moolmans and McConnell Dowell businesses with Murray & Roberts’ Underground Mining and Oil & Gas platforms. It will also create a large multinational engineering and construction business, with the “accompanying benefits of additional scale in Murray & Roberts’ key markets”.

The proposed acquisition of Aveng comes shortly after Murray & Roberts turned down a R15 per share hostile takeover bid by German investor Aton, which currently owns 40% of Murray & Roberts. “The board of directors of Murray & Roberts will be engaging with Aton, as a significant shareholder, regarding the merits of the potential transaction in order to procure its support,” the company stated.

M&R’s share price had dropped by 2.53% to R15:00 45 minutes after the announcement was made, while Aveng’s share price increased by 9.89% to R1.00.

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

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