German investment house ATON has allowed its $426 million offer for South Africa’s Murray & Roberts to lapse after failing to obtain clearances or approvals by South Africa’s regulatory bodies by Monday, September 30th.
In July South Africa’s Competition Commission recommended to the Competition Tribunal that the proposed acquisition be prohibited.
The company still plans to maintain its shareholding in M&R
ATON wanted to use the construction company as a gateway to expand in Africa’s most industrialised economy.
See full statement below:
Shareholders of Murray & Roberts (“M&R”) are referred to ATON’s mandatory offer in terms of section 123 of the Companies Act, 71 of 2008 to all M&R Shareholders, other than ATON or ATON’s affiliates (“Offer”), to acquire all the remaining issued and to be issued ordinary shares of M&R not already owned by ATON or any ATON affiliate at an offer consideration of ZAR17.00 per Offer Share. Unless otherwise indicated, capitalised words and expressions in this announcement have the meanings ascribed to them in the mandatory offer circular (“Offer Circular”) posted by ATON to M&R Shareholders eligible to participate in the Offer on Monday 4 June 2018, and published on its website www.aton-offer.com/ on Tuesday 5 June 2018. LAPSING OF THE OFFER The Offer was subject to the fulfilment or waiver, as the case may be, of certain Conditions set out in paragraph 3.2 of the Offer Circular by no later than the Long Stop Date. The Long Stop Date for the Offer was initially 31 March 2019, and was extended twice by ATON to 30 June 2019 and Monday, 30 September 2019, respectively. Despite ATON having committed significant resources towards fulfilling the Conditions of the Offer, the Condition relating to the granting of merger control clearances or approvals in all relevant jurisdictions, as set out in paragraph 126.96.36.199 of the Offer Circular, has not been fulfilled by the Long Stop Date. ATON carefully considered whether to further extend the Long Stop Date in accordance with its rights to do so under the Offer Circular. As a result of: (i) the continued stance of the independent board of M&R (“Independent Board”) to not cooperate with or provide its recommendation for the Offer; (ii) the South African Competition Commission’s (“Competition Commission”) recommendation, dated Friday, 19 July 2019 (“Recommendation”), to the South African Competition Tribunal (“Competition Tribunal”) that the proposed merger between ATON and M&R be prohibited; (iii) the oppositional stance adopted by the Independent Board during the ongoing Competition Tribunal proceedings; (iv) the significant risks associated with each extension of the Long Stop Date, including the exposure associated with maintaining in place the cash confirmation that ATON is obliged to submit to the South African Takeover Regulation Panel in connection with the Offer; and (v) the extended period of time that has elapsed since the commencement of the Offer, ATON has elected not to further extend the Long Stop Date. Accordingly, the Offer has lapsed in accordance with its terms. As the Offer has lapsed, it is no longer capable of further acceptance by M&R Shareholders, and those M&R Shareholders who tendered acceptances of the Offer are no longer bound by such acceptances. If you are a Dematerialised Shareholder who accepted the Offer, there is no need to take any further action, and it is advisable to contact your CSDP or broker should you have any questions. If you are a Certificated Shareholder who accepted the Offer, Documents of Title will be returned to you by registered post within five business days following the lapsing of the Offer. SOUTH AFRICAN COMPETITION PROCESS Whilst ATON respectfully disagrees with the Competition Commission’s Recommendation, and remains convinced that the proposed merger does not raise any competition concerns and would result in significant public interest benefits, ATON has decided not to continue participating in proceedings before the Competition Tribunal to contest the Recommendation. ATON’S INTENTIONS WITH REGARD TO M&R ATON intends to remain invested in and support M&R as a significant shareholder.
*Updated to make paragraph 1 clearer