Aton buys more M&R shares but nothing changes

Murray & Roberts chief executive Henry Johannes Laas presenting the company financial results to media and shareholders at their offices in Johannesburg.Photo: Simphiwe Mbokazi (ANA)

JOHANNESBURG – German family-owned investment holding firm Aton, which has made a hostile takeover bid for Murray & Roberts (M&R), has acquired a further 6600 shares in the listed engineering and construction group but its total shareholding has remained unchanged.

Aton acquired the shares at R15 each on Friday, saying following settlement of the acquisition tomorrow, it would own 39.6percent of the entire M&R issued share capital which translates to about 39.8percent of the voting rights.

This is the same voting rights percentage Aton owned on May 11 when it confirmed “good progress” following the opening of its offer to acquire the majority of M&R.

Aton was required in terms of Section 98 of the Companies Regulations to disclose any shares acquired in the open market during the offer period.

Aton’s stated intention was to acquire 50percent plus one M&R shares which would have lapsed if not declared unconditional in terms of acceptances received by June 14.

M&R has urged its shareholders to reject the offer and also urged shareholders who had submitted the required instruction accepting the takeover to consider retracting it.

Ed Jardim, the group investor and media executive at M&R, said yesterday that the difference between the percentage shareholding Aton owned in M&R and how that translated into voting rights related to about R38million the group bought back from the market in November last year.

Jardim said this share buyback occurred shortly before Aton voted down the resolution at M&R general meeting, allowing the company to buy back its own shares.

He said M&R did not cancel the shares it bought but moved them to treasury shares.

“As we took them out of the market and didn’t cancel them, all shareholders’ actual shareholding stayed the same, but their voting right increased by roughly 0.2percent,” said Jardim. “Hence, Aton’s shareholding remained at 39.6percent but their voting rights increased to 39.8percent.”

On Friday, M&R announced the proposed acquisition of financially-troubled listed construction group Aveng in an all-share transaction valued at R1billion, drawing a sharp reaction from Aton indicating that it would not support the transaction.

Aton said it had not had any engagement with either M&R or Aveng on the transaction, which directly conflicted with M&R’s stated strategy to exit both the infrastructure and building sector and manufacturing.

It said the proposed Aveng transaction would also introduce significant risk to M&R by significantly increasing its debt burden and because it involved taking over businesses that incurred R6.7bn of losses in its 2017 financial year.

It also raised flags on the restructuring of significant parts of activities that Aveng itself had been unable to do.

Aton claimed the transaction’s “sole intent appears to be to frustrate Aton’s compelling proposition to M&R shareholders”.

However, M&R chief executive Henry Laas was emphatic that the proposed bid for Aveng had not been launched in an attempt to frustrate Aton’s bid.

Lass said M&R had received board approval to pursue the opportunity with Aveng months before it received a firm intention letter from Aton.

M&R would on June 19 be holding a shareholders meeting in terms of Section 126 of the Companies Act, which dealt with frustrating actions.

Jardim said M&R had made contact with Aton about its offer for Aveng and requested a meeting to discuss the merits of the potential transaction.

“They have replied saying that they will consider our request and come back to us,” he said.

M&R shares rose 0.50percent on the JSE yesterday to close at R16.03.