Wrap Text
Proposal to acquire Clough Limited at A$1.46 per share and Cautionary announcement
MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1948/029826/06
JSE Share Code: MUR
ISIN: ZAE000073441
("Murray & Roberts" or "Company")
Proposal to acquire Clough Limited at A$1.46 per share and Cautionary
announcement
1. Introduction
Murray & Roberts is pleased to announce a proposal which has the support of
the Clough independent Directors to acquire all of the ordinary shares in
Clough Limited (“Clough”) that Murray & Roberts does not already own at
A$1.46 cash per share (the “Proposal”). The consideration for the Proposal
will be 100% cash and is expected to include both a cash capital component
and a fully franked dividend component with the franking credits providing
additional value to eligible shareholders. Murray & Roberts currently owns
61.6% of Clough.
Murray & Roberts’ Proposal provides a premium to Clough’s all time high
share price and an attractive premium to the recent trading price of Clough
shares on the Australian Stock Exchange to Clough minority shareholders,
reflecting a premium of:
% Premium to A$1.46 Proposal
Last close price of $1.115 on 30.9%
(Tuesday 30 July 2013)
1 month volume weighted average 25.5%
price (“VWAP”)of $1.164 to
Tuesday 30 July 2013
3 month VWAP of $1.145 to 27.5%
Tuesday 30 July 2013
The aggregate consideration under the Proposal equates to approximately
A$449m (excluding transaction costs), equivalent to approximately ZAR4.0
billion at the ZAR/A$ exchange rate as at the date of this announcement.
2. Proposal structure, conditions and other matters
The Proposal is intended to be implemented by way of a scheme of
arrangement (“Proposed Scheme”) under the Australian Corporations Act.
The Proposal is subject to:
- final approval by Murray & Roberts following the satisfactory
completion of confirmatory due diligence,
- the negotiation, finalisation and execution of a Scheme Implementation
Agreement (“SIA”) between Murray & Roberts and Clough, and
- a unanimous recommendation by Clough independent directors in support
of the transaction (subject to an Independent Expert determining that
the transaction is in the best interests of Clough shareholders, and
no superior proposal emerging).
Subject to the conditions above being satisfied, the Clough independent
directors have indicated that they intend to unanimously support the
transaction.
Ultimately, the Proposal will be subject to:
- Clough minority shareholder approval (excluding Murray & Roberts), and
- A separate approval by Murray & Roberts shareholders as it is
anticipated to classify as a Category 1 transaction under the Listings
Requirements of JSE Limited.
The Proposal will include conditions relating to any other necessary
regulatory approvals, consents and other conditions that are customary in
transactions of this nature.
3. Details of Clough’s business
Clough is a leading engineering and project services contractor servicing
the Oil & Gas, Chemical and Mining & Mineral markets in Australia and Papua
New Guinea. Murray & Roberts has had a long association with Clough since
initially acquiring a shareholding in 2004. Murray & Roberts has increased
its holding over time and Clough now forms a core component of Murray &
Robert’s international operations.
4. Transaction Rationale
Murray & Roberts considers that the Proposal is strategically compelling,
consistent with the Company’s long term growth strategy and a logical step
to fulfil the Company’s strategic objectives. Following the recent disposal
by Murray & Roberts of its manufacturing businesses, the proposed
transaction:
- Creates a focussed international diversified engineering and
construction business, leveraging respective capabilities and
management competencies across Australasia, South East Asia and
Africa;
- Increases Murray & Roberts’ exposure to target market sectors which
are considered to present long term growth potential;
- Allows Murray & Roberts and Clough to better leverage Clough’s oil &
gas capabilities and expertise into opportunities in Africa;
- Creates a strong platform for further expansion of Murray & Roberts’
international business;
- Secures control of 100% of the operations, assets, cash flow and
strategic direction of Clough;
- Is expected to be immediately EPS accretive; and
- Simplifies the corporate and operating structure of the consolidated
group.
5. Transaction Funding
Murray & Roberts intends to fund the Proposal through a combination of
existing cash, cash on Clough’s balance sheet and modest acquisition
financing. As part of the Proposed Scheme, Murray & Roberts intends to seek
Clough minority shareholder approval to utilise Clough’s excess cash under
the Australian Corporations Act.
Following execution of this Proposal and redeploying available funds from
recent asset divestments, Murray & Roberts’ consolidated gross debt
position is expected to remain largely unaffected.
Further details of the terms of the Proposal, including key dates and times
and the pro forma financial effects of the Proposal on Murray & Roberts,
will be announced in due course, following the successful completion of
confirmatory due diligence and assuming the execution of a SIA.
6. Cautionary announcement
Shareholders are advised that the Proposal remains subject to, amongst
others, the execution of a SIA, which if successfully concluded, may have a
material effect on the price of the Company’s securities. Accordingly,
shareholders are advised to exercise caution when dealing in the Company’s
securities until a full announcement is made.
Bedfordview
30 July 2013
Lead JSE Sponsor:
Macquarie First South Capital
Exclusive Financial Adviser:
Macquarie First South Capital / Macquarie Capital Australia
Legal counsel:
Webber Wentzel / Corrs Chambers Westgarth
JSE Sponsor:
Deutsche Securities (SA) Proprietary Limited
Date: 30/07/2013 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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