JOHANNESBURG - Murray & Roberts has urged its shareholders who have submitted the required instruction accepting the hostile R15 a share takeover offer from German-based private investment holdings firm Aton to consider retracting the instruction.
In its official response to the conditional offer by Aton that was posted to shareholders on Friday, M&R’s independent board was also critical of Aton’s offer in terms of its price, structure, strategic rationale and future prospects for M&R.
The group also confirmed it had raised certain issues related to Aton’s offer with the Takeover Regulation Panel (TRP).
They include that the breach of 35 percent threshold following Aton’s acquisition of M&R shares from asset manager Allan Gray obliged Aton to make a mandatory offer to M&R shareholders, but Aton’s offer was a conditional offer and therefore did not comply with the mandatory-offer provisions.
In addition, M&R said the price agreed between Allan Gray and Aton for the M&R shares acquired under the forward sale agreement was subject to upwards adjustment, which would result in Allan Gray receiving a preferential benefit in the event of any increased offer consideration from Aton above R15 a share for Allan Gray’s entire shareholding in M&R.
M&R said the TRP was considering these issues, and shareholders would be informed of any developments.
The group added that the prospects of Aton reaching the required threshold of 90 percent of total shares, excluding the shares it already owned, to exercise its right to “squeeze out” the remaining shareholders and delist M&R on the current terms was “virtually nil”.
“As a consequence, Aton appears to have switched emphasis publicly to acquire a minimum of 50 percent of the total shares plus one share and leaving M&R listed. “As Aton has now accumulated 39.6 percent of the total shares, the independent board notes that Aton requires an additional approximately 11 percent of the total shares to fulfil the minimum acceptance condition to the Aton offer.
“The independent board accordingly highlights the importance that M&R shareholders that have not accepted the Aton offer take no action and that M&R shareholders that have given instructions to accept the Aton offer immediately consider withdrawing such instructions,” it said.
M&R said Aton’s offer would remain open for acceptances for a maximum of 45 business days and would thereafter lapse if it was not declared unconditional in terms of acceptances received by June 14.
Based on Aton’s stated strategic rationale for making the offer, M&R’s independent board believed the acquisition of all the remaining shares and subsequent delisting of M&R was
key to Aton achieving its stated ambitions for M&R. The Public Investment Corporation, the second largest shareholder in M&R with a shareholding of 20.157 percent in the group, last week joined financial services conglomerate Old Mutual in indicating that it would be rejecting Aton’s offer.
Old Mutual was the fifth largest shareholder in M&R with an about 5 percent shareholding. Shares in M&R dropped 0.99 percent on the JSE on Fri- day to close at R15.05.