Murray & Roberts advertising board.

CAPE TOWN - South Africa construction company Murray & Roberts (M&R) said on Friday that an independent board had recommended that its shareholders reject a takeover bid by Germany’s ATON, the latest rebuff to the acquisition attempt.

M&R reported interim profits that more than doubled, in part due to higher earnings from its underground mining activities, a sign of an upswing in the commodities sector which has made it an attractive target.

“It was clear to the Independent Board upfront that ATON’s approach was opportunistic and timed to coincide with unprecedented weakness in the company’s share price,” M&R said in a statement.

“The Independent Board, having taken the advice of (an) independent expert, communicated to shareholders its view that the ATON offer materially undervalued the strategic platforms and business prospects of Murray & Roberts,” it said.

M&R’s biggest shareholder German investor Lutz Helmig’s ATON, which owns more than a third of the South African group, made a buyout offer of R15 ($1.25) per share for M&R last month valuing the company at close to $600 million.

M&R rejected the bid saying it undervalued the company and its second biggest shareholder, South Africa’s Public Investment Corporation, has also snubbed the overture. An independent report has shown that a fair offer for the company would be as much as R22 per share.

The company’s share price closed at R15.20 on Thursday, almost double its 2018 low of R8.70 hit on March 22. When the planned buyout was announced on March 26, Murray & Roberts’ share price was close to a two-year low, according to Thomson Reuters’ data.