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M&R abandons Aveng plan

But ‘might revisit it in future’.

A defiant Murray & Roberts (M&R) on Wednesday announced that it has withdrawn its proposal to combine its business with that of struggling construction group Aveng, but maintains it is a good idea to potentially revisit the merger in future.

The withdrawal follows strong opposition against the proposed transaction from M&R’s suitor and biggest shareholder, the German group ATON. ATON is in the process of a hostile take-over of M&R and has accused the M&R leadership of embarking on the Aveng deal in an effort to frustrate ATON’s offer.

In the process ATON obtained 25% shareholding in Aveng, which gave it enough voting power to block the merger with M&R. ATON however succeeded in blocking the transaction before it came to a final shareholder vote, when it successfully appealed an earlier approval of the merger by the Takeover Regulation Panel.

M&R said in a statement to shareholders that in the light of the ATON shareholding in Aveng, and the successful appeal, the prospects of successfully implementing the merger with Aveng are limited and the M&R board therefore resolved to withdraw its proposal.

M&R’s board remained defiant and stated: “Notwithstanding the decision to withdraw, the board wishes to reaffirm its view that the strategic rationale for the combination of Murray & Roberts and Aveng remains compelling.”

The board said it “will continue to evaluate the possibility of revisiting the Potential Transaction in future”.

In a statement to shareholders, Aveng said it would continue with the early redemption of its bonds in an effort to reduce its debt and will announce further details shortly.

The Aveng share price increased by 1c to 9c and that of M&R by 2.52% to R17.90, which is 90c more than the R17.00 per share ATON is offering M&R shareholders. Its mandatory offer is valid until the end of March next year.

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