M&R ‘disappointed’ about ATON’s response to proposed Aveng merger

12 June 2018

Construction and engineeringservices company Murray & Roberts (M&R) has expressed its disappointment with German investment company and majority shareholder ATON, following ATON’s reaction to M&R’s interest in merging with constructionengineering company Aveng.

While the M&R board says it respects the right of any shareholder of the company to express their view, it is dismayed by the manner in which ATON, as both an offeror and the company’s material minority shareholder, has chosen to engage with M&R on this matter.

M&R has sought to engage with ATON on an urgent basis since the potential transaction with Aveng was first announced on May 18; however, owing to ATON’s availability, the first meeting between the two companies will only occur next week.

In light of the ATONmedia statement, which said M&R’s ‘frustrating action’ is a stunt to prevent ATON from exercising its full rights and voting, and ahead of the meeting with ATON, the M&R board reiterates to shareholders that the strategic rationale for the potential combination of M&R’s oil & gas and underground mining platforms with Aveng’s McConnel Dowell and Moolmans businesses is compelling.

The proposed transaction could further enable M&R’s stated strategy as a multinational engineering and construction group through the benefits of both scale and synergy; other than the McConnell Dowell and Moolmans businesses, M&R plans to dispose of the rest of Aveng accordingly.

M&R said its board is cognisant of the challenge faced by Aveng and its lossmaking subsidiaries and is conducting a due diligence review to verify all fundamental assumptions prior to making a formal offer.Meanwhile, the M&R board believes the minority shareholders in M&R should have an opportunity to decide whether the company further develops the Aveng transaction.

“Given the purpose of the resolution meeting on June 19, and in the interests of all M&R share-holders, the board requested ATON to undertake not to exercise the voting rights attached to any shares acquired after March 22 – any shares in M&R acquired by ATON or its affiliates as part of its proposed merger in excess of the 30% shareholding of M&R – until it has received the necessary merger control approval from the competition authorities,” M&R stated.

ATON rejected the board’s request. Accordingly, the board has applied to the Competition Tribunal for appropriate relief.ATON increased its shareholding in M&R to 39.8% in April, and further to 43.8% in May. 

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