JSE-listed Murray & Roberts’ (M&R’s) share price rose by more than 50% on Monday morning as it announced that German family owned business Aton plans to buy all shares in the company for R15 apiece.
M&R on Monday said Aton, which already holds 33% of M&R’s shares, had informed the group of its intention to open a general offer directly to M&R’s shareholders.
An independent board established by M&R will now review the correspondence received from Aton and the terms of the proposed offer.
M&R advised shareholders that no firm offer has been made by Aton yet. Further announcements would be made once the independent board has concluded its review of the proposed offer.
In a separate announcement, Aton, which has a diverse portfolio of investments in the mining, engineering, aviation and health technology sectors, has advised that it has obtained an irrevocable undertaking from investment service company Allan Gray, acting on behalf of its clients, representing about 10.9% of M&R’s ordinary share capital, to accept the proposed offer, if made.
In addition to the significant value that the offer represents to M&R’s shareholders, Aton believes the offer will have a positive impact on M&R in the long term and be beneficial for a range of stakeholders, including M&R’s management and employees.
Aton further explained that the proposed offer has strong strategic and commercial impetus, and that this transaction would include the M&R business portfolio into that of an international player of strength.
“This will enhance the capability of South Africa’s underground mining service industry to compete in international markets through leveraging Aton’s relationships with customers and other stakeholders. Importantly, it will create a strong platform for geographic expansion throughout Africa and globally,” the company said in a statement on Monday.
It is expected that M&R will also benefit from the skills and knowledge transfer of a leader in technology and innovation.
Aton states that the offer represents a vote of confidence in the South African economy by a large multinational German investor and that it will constitute a significant source of foreign direct investment (FDI), as it represents potential FDI of up to R4.5-billion into South Africa.
The company further pointed out that it understands and respects the importance of transformation and diversity in the context of broad-based black economic empowerment (BBBEE) in the country and for M&R’s South African operations.
To this end, Aton intends to support M&R in its continued efforts to foster BBBEE initiatives.
M&R’s share price on the JSE rose to R14.52 on Monday morning, up 50.62% compared with Friday’s close of R9.64.