Murray & Roberts’ proposed deal with rival construction company Aveng could still be blocked by M&R’s biggest shareholder ATON even though South Africa’s antitrust body on Monday limited its voting rights.
M&R, a major South African construction company, has been in tug of war with its biggest shareholder investor ATON since March when the German investment house launched a $400 million takeover bid, which M&R rejected as poor value for shareholders.
When it first made its takeover the offer in March, ATON – led by German investor Lutz Helmig – held roughly 29 of M&R. It has since raised that roughly to 44 – large enough to scupper M&R-Aveng tie-up.
To ward off ATON, M&R proposed an all-share merger with rival Aveng last month.
M&R also asked South Africa’s competition authorities to stop ATON from fully exercising its voting rights to block its Aveng deal. The proposed Aveng transaction needs backing from shareholders with 75 of the voting rights.
The Competition Tribunal said on Monday ATON could fully vote its shares but limited this to 50 less one share in the event that attendance at a shareholders meeting on Tuesday was unexpectedly low and that ATON’s voting rights would constitute 50 or more of the total votes at the meeting.
“M&R has failed in its attempt to, in ATON’s view, use the Competition Act as a further frustrating action to prevent ATON from voting against M&R’s poison pill – the proposed Aveng transaction,” ATON said in a statement.
M&R spokesman Ed Jardim said M&R had a prescribed number of days to decide if it wanted to appeal. He said the M&R shareholder meeting would go ahead on Tuesday.
M&R shareholders have to decide on Tuesday whether the company can further explore the potential transaction with Aveng. Should this resolution pass by a simple majority, the board will move to finalise the terms of the proposed offer with the board of Aveng and then present a formal offer.
The potential Aveng transaction will be presented to M&R and Aveng shareholders for approval at a later date, if a formal offer is made.