M&R shares dive on JSE as Aton walks away
CAPE TOWN – Murray & Roberts (M&R) slumped more than 17 percent yesterday morning before recovering later in the day as the iconic construction stock continued to slide following a failed take-over bid by Germany-based Aton Group.
The price fell 17.2 percent to R10.10, and though it gained ground later in the day it reflected the current bearishness in the price. The share price has fallen 9 percent ever since Aton walked away from its takeover attempt.
The failure of the bid has been well received by some who said it would have robbed South Africa and local investors of one of the country's last, biggest construction groups, and of the construction and engineering skills held within the group.
This month, Aton, which owns 44 percent of M&R, let its offer to acquire the rest of M&R’s shares lapse after the Competition Commission ruled the bid illegal, and after further hearings were scheduled at the Competition Tribunal for December this year and in January.
M&R directors said at the time that they valued the shares at R20-R22 per share, which had been well above the R17 that Aton offered.
Aton, which formally made its bid early last year, has indicated it intends to remain invested in M&R.
M&R has substantially improved operations in the interim. In August M&R said its order book for the year to June 30, 2019 had jumped 55 percent on the previous year to almost R47 billion, while the near-orders had jumped 8 percent to R14.4bn. It also made four acquisitions in the year.
It has diversified to become a major player in underground mining in six continents, building oil and gas platforms as well as other infrastructure building capabilities.
In the year to June, diluted headline earnings per share was down by 10 percent, but the annual dividend was raised to 55 cents from 50c. Net asset value was at R13 per share.
Gryphon Asset Management portfolio manager Casparus Treurnicht said although M&R had improved its financial performance, its markets were subject to global economic cycles, and in the current environment, “super profits” were not anticipated and it was difficult to project its growth in the future.
M&R closed 0.98 percent lower at R12.08 on the JSE on Monday.