Following ATON communicating to Murray & Roberts its intention to make a firm offer to purchase it – an independent review board has examined the proposal.
Murray & Roberts states the offer is opportunistic and has been made at a time of unprecedented share price weakness because of low liquidity, declining valuations of its legacy peers in the construction sector and halting of its share buy-back programme in 2017.
In addition, it believes the cash offer price of R15.00 per share materially undervalues the company based on its prospects.
A statement from the company lists other points of contention including:
- the rationale presented by ATON for the company is weak in a number of material respects
- the independent review board appointed by Murray & Roberts is of the view that the proposed offer price, and the prospects of ATON successfully delisting Murray & Roberts are very low
- 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 Murray & Roberts adrift into a protracted period of uncertainty as ATON gradually increases its shareholding and attempts occasionally to delist the company; and
- it is not clear how ATON proposes to manage the dilution of Murray & Roberts’ B-BBEE ownership credentials and the potential resultant impact on material contracts and employment
Accordingly, the independent board has advised that it will be recommending to Murray & Roberts’ shareholders to not accept the offer, when made.
The board also recommends no further action be taken by Murray & Roberts’ shareholders in connection with the offer.