Investment company ATON, which has made a mandatory offer to buy all the shares in Murray & Roberts (M&R) it does not already own, has once again reiterated it opposition to M&R’s proposed acquisition of Aveng.

The company said in a statement on Thursday that the potential Aveng transaction protects Aveng bondholders at the expense of M&R shareholders and that there is no clear strategic benefit for M&R.

ATON further said the acquisition of troubled Aveng would be value destructive to M&R owing to key factors such as material legacy issues across Aveng’s platform.

“M&R is proposing to pay R1-billion for Aveng, representing a 685% premium to the market cap. Acquiring Aveng equates to higher operating risk, significant debt and negative cashflow,” ATON said.

The company once again referred to the transaction as a highly detrimental “poison pill” to M&R.

Through the Aveng transaction, ATON believes M&R will be exposed to the high-risk general construction, steel and manufacturing sectors.

However, M&R CEO Henry Laas has said the decision to dispose of the infrastructure and building businesses supports the group’s long-term strategy to focus its business on the global natural resources markets, and “follows an extended period of careful planning and consideration.”

M&R has indicated that it will sell Aveng’s general construction, steel and manufacturing businesses; however, Aveng has previously failed to dispose of these businesses, ATON pointed out.

It added that there was a potential negative impact on M&R’s value proposition as its recent re-classification to the diversified industrials sector from the construction sector on the JSE, could be reviewed.

“There is no clear benefit for M&R shareholders from the proposed transaction,” ATON stated.

Meanwhile, M&R’s independent board again on Thursday urged shareholders not to take action on ATON’s proposed offer of R17 for each M&R share.

ATON on June 5 formally withdrew its voluntary offer to M&R shareholders and announced the posting of a mandatory offer circular to M&R shareholders.

The mandatory offer will remain open to M&R shareholders until ten business days after it has been declared unconditional. ATON expects to declare the offer unconditional by March 31, 2019.