An independent board established by Murray & Roberts (M&R) to assess the proposal by German family-owned business Aton to acquire all shares in M&R at R15 a share, has again recommended that M&R shareholders reject the offer.

In an announcement on Friday, the M&R independent board reiterated that Aton’s approach was opportunistic and said it was timed to coincide with unprecedented weakness in M&R’s share price.

The independent board, having taken the advice of the independent expert, communicated to the shareholders its view that the Aton offer materially undervalued the strategic platforms and business prospects of M&R.

Engineering News Online reported earlier this month that the board had previously said a fair value price range for control of M&R would be between R20 and R22 a share.

“The Aton offer significantly undervalues the strategic platforms of M&R and its future prospects. The independent board has taken its responsibilities to guide M&R’s shareholders in relation to the Aton offer seriously,” said M&R independent board chairperson Suresh Kana.

Accordingly, Kana noted that due consideration has been given in arriving at the independent board’s recommendation that M&R shareholders reject the Aton offer.

“The independent board, together with the full board of directors of M&R, are confident in the strategy of M&R and, therefore, the fair value of the company based on its prospects.”

The independent board’s recommendation to reject the Aton offer and its assessment of the terms and conditions is set out in a circular to be posted to M&R’s shareholders on Friday.

The independent board recommends that M&R shareholders who have not accepted the Aton offer continue to take no action in relation to the offer circular posted by Aton earlier this month and that shareholders who have accepted the Aton offer consider retracting the instruction. 

Some of M&R’s biggest shareholders, including the Public Investment Corporation (PIC), have rejected the Aton offer.

Aton CEO Thomas Eichelmann, earlier this month said the company believes Aton’s proposition and proven record in the mining industry will be beneficial not only to the shareholders of M&R but also to other stakeholders.

Eichelmann stressed that Aton’s interest in M&R is of a long-term nature.

Aton hopes to obtain a minimum of a 50%, plus one share majority in M&R.

Aton on April 17 increased its interest in M&R to 39.8%, while the PIC increased its stake to 20.15%.