Aton raises its offer for M&R shares

Murray & Roberts advertising board.

JOHANNESBURG – German family-owned investment holding firm Aton has increased its offer price in its hostile takeover bid for Murray & Roberts (M&R) and, subject to the approval of the JSE, plans to waive the minimum acceptance condition in its offer for the listed engineering and construction group.

This announcement by Aton on Friday coincided with the group also disclosing that it had further increased its shareholding in M&R with the acquisition of a further 18.25million M&R shares on the market on Wednesday.

This increased Aton’s holding in M&R to about 43.70percent, which translated into about 43.94percent of the voting rights of M&A.

Aton said these additional M&R shares had been acquired for an average consideration of R16.99 a share and a maximum price of R17 a share, adding that in terms of the JSE’s takeover regulations it was now required to increase the price of its direct offer to M&R shareholders to R17 a share.

Aton said M&R shareholders who had previously accepted the offer would be entitled to receive the increased offer price and need not take any further action.

This is the second time since Aton made its direct R15 a share offer to M&R shareholders that it has increased its shareholding in the group through the acquisition of more of the group’s shares on the market.

Aton previously reported that it had acquired a further 6600 shares in M&R on May 18 at R15 a share, the same price as its offer price.

It added that it had also advised M&R shareholders that it intended to waive the minimum accept condition in its direct offer to M&R shareholders.

M&R’s said on Friday that its independent board of directors would consider the contents of the announcement by Aton, but noted that the increased offer price was still below the low end of its fair value range of R20 to R22 a M&R share.

“The independent board will provide its perspectives once the matters contained in the announcement are confirmed by Aton and and will also seek to engage Aton regarding these developments,” it said.

Aton added on Friday that it had commenced engagements with the JSE’s Takeover Regulation Panel to give effect to the waiver of the minimum acceptances condition and would publish an appropriate announcement in due course in this regard.

In terms of the offer circular, Aton’s stated intention was to acquire 50percent plus one share in M&R and its offer for M&R would lapse if it was not declared unconditional in terms of acceptances received by June 14.

M&R has earlier urged its shareholders to reject the offer and those shareholders who had submitted the required instruction accepting the R15 a share takeover offer from Aton to consider retracting the instruction.

About 10 days ago M&R announced it proposed acquisition of financially-troubled listed construction group Aveng in an all-share transaction valued at R1billion, which drew a prompt and sharp reaction from Aton, which indicated that it would not support the transaction.

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

M&R chief executive Henry Laas emphatically denied this, stressing that it had received board approval to pursue the opportunity with Aveng months before it received a firm intention letter from Aton that it intended making an offer for M&R.

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.

Shares in M&R dropped 0.29percent on the JSE on Friday to close at R17.20.