M&R shares continue to slide after Competition Commission recommendation
The group fell 5percent to close at R11.20, taking a broadside from Friday when it dropped as much as 20percent, the lowest level in 16 months, on the news that the Aton takeover would be prohibited.
Aton said it would await the commission’s reasons and said the ball was now in its court to exercise its right to contest the decision in the next 10 days,
M&R’s group investor and media relations executive Ed Jardim said the group would report its position on the matter after Aton had exercised its options.
“All we can do for now is clarify facts as set out by the Competition Commission, but it is essentially Aton that can still oppose the recommendation,” Jardim said, making reference to the Sens announcement on Friday that spelt out the options.
“Should Aton decide to contest the recommendation, a pre-hearing conference will be convened by the Competition Tribunal within 10 business days of the recommendation. At the pre-hearing conference, a timetable will be determined. The Competition Tribunal will thereafter determine an appropriate set-down date for a merger hearing. Following the merger hearing, the Competition Tribunal, having reference to the recommendation, can either prohibit the merger or approve it (with or without conditions).”
Jardim insisted that M&R was a bystander in further proceedings and that its independent board would continue to engage with the regulators as required and update shareholders regarding all relevant developments.
“Should Aton decide not to contest the recommendation, the mandatory offer will fail in accordance with its terms,” the group said.
The commission ruled that both the public interest commitment and the proposed efficiencies were not likely to outweigh the significant competition concerns identified during the assessment of the merger.
It said it could not agree with the merging parties on a set of merger conditions which would remedy the competition concerns.
Aton provides a range of mining services, including the excavation of vertical or inclined openings from the surface for conveyance of miners, materials, ventilation, pumping water, in addition to hoisting ore and waste rock, operational or maintenance activities, infrastructure development and upgrade, and whole of mine operational management.
M&R on the other hand delivers sustainable and fit-for-purpose project engineering, procurement, construction, commissioning, operations and maintenance solutions through three main global sectors: oil & gas; underground mining; and power & water.
“The commission considered the effects of the proposed transaction and found that the merging parties are close competitors in the underground mining market in South Africa,” the commission said
Meanwhile, the Competition Tribunal has approved a proposed transaction which entails the formation of an economic alliance between WBHO Construction and Trencon Construction.
BUSINESS REPORT
Source: iol.co.za
