The R15-a-share offer that German investment firm Aton is proposing for JSE-listed Murray & Roberts (M&R) falls well short of what the independent board believes the company is valued at.
The M&R independent board appointed to review the planned offer reported on Wednesday that it had received a valuation report from independent expert BDO South Africa, following which it had determined that a fair value price range for control of M&R was between R20 a share to R22 a share.
Following the BDO’s valuation report, the independent board further affirmed its view that Aton’s proposed offer “materially” undervalued M&R and said it would strongly recommend that shareholders did not accept the offer.
The proposed offer was announced last week and is expected to open on Friday.
M&R previously held discussions with Aton about possibly combing that company’s Redpath Mining with M&R’s underground mining business platform. However, the independent board was sceptical about such a combination, saying last week that it presented “limited strategic rationale” at the current time and that the current combined market share of these businesses might reduce after a possible combination.
M&R traded at R14.22 a share on Wednesday.