Civil engineering group Protech Khuthele CEO Anthony Page on Monday said that, although contract mining and equipment group Eqstra’s R146-million final offer to acquire the remaining 67.2% stake in Protech it did not already own, was below net asset value (NAV), some shareholders could accept it.

Last week, Eqstra posted its final offer circular to Protech shareholders, offering 60c a share in cash to acquire the 67.2% interest. However, Protech stated in its latest half-year results presentation that the NAV of its shares were 93.8c apiece.

“The sentiment towards construction [in South Africa] is not that great, so some [Protech Khutele stakeholders] may be prepared to take a loss just to get out,” Page told Engineering News Online.

He said there was no need for haste in responding to Eqstra’s offer, as Protech’s shareholders and PricewaterhouseCoopers, which Protech appointed as independent adviser on the deal, had 20 days to consider the deal.

Eqstra CEO Walter Hill, last week said the offer, which opened on February 22 and would close on July 26, would provide Protech shareholders with an attractive cash price to realise fair value at a healthy premium.

“Our offer positions Protech appropriately to benefit from the synergies and economies of scale that can be achieved by sharing resources between Eqstra and Protech,” he indicated.

However, Page stated that such synergies would still have to be discussed, “Protech and Eqstra’s business models are very different; Eqstra is an asset-based leasing business and Protech is a construction business. I do not yet know how these will tie together.”

Page was appointed to turn around Protech’s financial position, which had been “on a downward spiral for a while” and said the turnaround programme that was implemented at the company at the beginning of last year was bearing fruit. He pointed out that progress was evident in Protech’s half-year results to the end of August, which showed an operating profit of R32.2-million, compared with losses incurred at the end of the previous financial year.

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Page said his confidence in the local construction market persisted, despite its various challenges.

“Some of our newly targeted clients such as Transnet, the South African National Roads Agency Limited and Eskom will add to our ability to pick up any slack that we might see in the mining arena, which remains volatile,” he stated.