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Independent Board announcement regarding the Ruling of the Takeover Special Committee
MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441
(“Murray & Roberts” or the “Company”)
INDEPENDENT BOARD ANNOUNCEMENT REGARDING THE RULING OF THE
TAKEOVER SPECIAL COMMITTEE, THE WITHDRAWAL OF THE VOLUNTARY OFFER
BY ATON GMBH (“ATON”) AND THE ISSUE OF A NEW MANDATORY OFFER
IMPORTANT NOTICES
* The Independent Board of Murray & Roberts approached the Takeover Regulation Panel
for relief for Murray & Roberts’ shareholders following review of the terms offered by ATON
in terms of a forward sale agreement entered into with Allan Gray in March 2018.
* The matter was strongly contested by ATON, notwithstanding the prejudice posed to
Murray & Roberts shareholders, both past and present, and subsequently referred to the
Takeover Special Committee.
* The Takeover Special Committee handed down its ruling on Friday, 25 May 2018 and
instructed ATON to withdraw its voluntary offer and re-issue a new compliant mandatory
offer, ensuring equal treatment for all shareholders.
* The ruling is a favourable outcome for Murray & Roberts shareholders. In order to table a
compliant mandatory offer, ATON is required to remove, amongst other things:
- the condition that the offer can be declared unconditional subject to ATON achieving a
minimum shareholding of 50% plus one Murray & Roberts ordinary share;
- the subjective price adjustments and conditions precedent that were capable of being
accepted, rejected or waived at ATON’s sole discretion; and
- the preferential make whole price adjustment that had been offered by ATON to Allan
Gray, in the event that the offer price was subsequently increased by ATON above R15.00.
* The Independent Board draws shareholders attention to the announcement by ATON
yesterday, withdrawing the voluntary offer and the re-issuing of a firm intention to make a
new mandatory offer. The Independent Board and its advisers are currently reviewing the
new firm intention announcement.
* ATON has now tabled an increased offer price of R17.00 per Murray & Roberts ordinary
share, despite strongly repeating over the past eight weeks that the previous offer price of
R15.00 per Murray & Roberts ordinary share represents full value for Murray & Roberts
shareholders.
* The increased offer price of R17.00 remains below the Independent Board’s guided fair
value range of R20.00 to R22.00 per Murray & Roberts ordinary share and therefore
continues to undervalue Murray & Roberts based on its prospects.
* The Independent Board is of the view that ATON is resolved to follow through on its offer
to acquire control of Murray & Roberts on a contested basis. Given that fact and that ATON
has now begun increasing the offer price, the Independent Board advises Murray & Roberts’
shareholders to continue to take no further action at this time.
1. INTRODUCTION
Shareholders are referred to the firm intention announcement released by ATON on SENS
on 28 May 2018, regarding ATON’s intention to make a new mandatory offer to acquire all
the issued ordinary shares of Murray & Roberts not already owned by ATON, at a cash
offer price of ZAR17.00 per Murray & Roberts ordinary share (“New ATON Mandatory
Offer”). In addition, shareholders are referred to the simultaneous withdrawal by ATON of
the non-compliant voluntary offer posted to Murray & Roberts shareholders on 9 April 2018
(“ATON Withdrawn Offer”).
2. TAKEOVER SPECIAL COMMITTEE (“TSC”) RULING
Shareholders are referred to the announcement made by the independent board of Murray
& Roberts (“Independent Board”) on Friday, 20 April 2018, regarding the posting of the
Independent Board’s response circular to the ATON Withdrawn Offer and specifically to the
reference to certain matters that had been lodged by the Independent Board with the
Takeover Regulation Panel (“TRP”) in relation to the ATON Withdrawn Offer.
2.1 Requirement for ATON to make a mandatory offer
- On 29 March 2018, ATON proposed and then entered into a forward sale agreement
(“Forward Sale Agreement”) with Allan Gray (Pty) Ltd (“Allan Gray”), replacing an
irrevocable undertaking to accept the ATON Withdrawn Offer issued by Allan Gray.
- ATON excluded the Murray & Roberts’ ordinary shares acquired from Allan Gray
pursuant to the Forward Sale Agreement, from the ATON Withdrawn Offer.
- The acquisition by ATON of Murray & Roberts’ ordinary shares under the Forward Sale
Agreement resulted in ATON acquiring more than 35% of the issued voting shares of
Murray & Roberts, obliging ATON to make a mandatory offer to Murray & Roberts’
shareholders, as contemplated in section 123 of the Companies Act of 2008
(“Companies Act”) (as read with regulation 86).
- The ATON Withdrawn Offer (as construed by ATON) was a conditional voluntary offer
and therefore did not comply with the requirements for a mandatory offer in a number
of material respects, including the presence of:
- a condition that the offer could be declared unconditional by ATON subject to ATON
achieving a minimum shareholding of 50% plus one Murray & Roberts ordinary share;
- subjective potential downward price adjustments, determined at ATON’s sole
discretion; and
- subjective conditions precedent to the offer that were capable of being accepted,
rejected or waived at ATON’s sole discretion.
2.2 Removal of the preferential treatment of shareholders
- ATON afforded Allan Gray a make whole price adjustment on the Murray & Roberts
ordinary shares sold by Allan Gray to ATON, in terms of the Forward Sale Agreement.
- In the event that ATON increased the offer price above R15.00, ATON was obliged to
pay Allan Gray the increased offer price on the shares sold by Allan Gray to ATON
under the Forward Sale Agreement in March 2018. As a consequence, Allan Gray
would benefit from any increased offer price above R15.00 per Murray & Roberts share
on all its shares held at the time of entering into the Forward Sale Agreement.
- This make whole adjustment mechanism resulted in the preferential treatment of one
shareholder relative to other Murray & Roberts shareholders, both past and present.
The above matters were set down by the TRP for consideration at a hearing of the TSC
held on 15 and 16 May 2018.
The TSC subsequently handed down its ruling on these matters on Friday, 25 May 2018
(“TSC Ruling”). The TSC ruled in the Independent Board’s favour. ATON has accordingly
been instructed to withdraw the ATON Withdrawn Offer and issue a compliant mandatory
offer. In addition, ATON needs to extend the make whole adjustment afforded to Allan Gray
to all Murray & Roberts’ shareholders, to the benefit of those Murray & Roberts
shareholders that sold their Murray & Roberts shares to ATON after 29 March 2018 (i.e.
date of the Forward Sale Agreement).
Following receipt of the TSC Ruling on Friday, 25 May 2018 and in light of ATON’s intention
to increase the offer price to R17.00 per Murray & Roberts share communicated the same
day, the Independent Board sought to engage with ATON with a view to establishing
whether there was a basis for agreeing a mutually acceptable set of terms and to cooperate
in implementing the New ATON Mandatory Offer, even if the offer price could not be
recommended by the Independent Board. The basis for any such discussions commencing
would be on the understanding that the increased offer price of R17.00 remained too low
and not in the best interest of the Company or its shareholders. Regrettably, ATON was not
willing to engage with the Independent Board on this basis and subsequently released its
new firm intention announcement regarding the intention to make the New ATON
Mandatory Offer.
2.3 Actions taken by the Independent Board
The Independent Board notes the ruling by the TSC regarding the actions taken by the
Independent Board in responding to the ATON Withdrawn Offer.
At all times since receipt of the firm intention offer letter in March 2018, the Independent
Board’s actions and guidance has been in the best interests of the Company and its
shareholders. The guidance to Murray & Roberts’ shareholders to not accept the ATON
Withdrawn Offer was carefully considered, taking into account the opportunistic nature of
ATON’s approach. Ultimately, these actions have forced ATON to issue a new firm intention
announcement and in due course the New ATON Mandatory Offer at an increased offer
price with reduced conditionality.
3. NEW ATON MANDATORY OFFER
The Independent Board has noted ATON’s new firm intention announcement to make the
New ATON Mandatory Offer at an increased cash offer price of R17.00 per Murray &
Roberts’ ordinary share. The Independent Board is reviewing the new firm intention
announcement in light of the TSC Ruling and will provide further guidance to Murray &
Robert’s shareholders in due course.
Upfront, the Independent Board wishes to draw shareholders attention to the fact that the
increased offer price of R17.00 remains below the Independent Board’s fair value range of
R20.00 to R22.00 per Murray & Roberts’ ordinary share.
The Independent Board is of the view that ATON remains resolved to implementing the
transaction on a contested basis. This is evidenced by the increased offer price and
proposed revised terms for the New ATON Mandatory Offer, despite ATON being strongly
of the view for the past eight weeks that an offer price of R15.00 per Murray & Roberts’
ordinary share represented a full value for the Company.
The Independent Board will continue to act in the best interests of the Company and to
seek to maximise value for Murray & Roberts shareholders. Accordingly, Murray & Roberts’
shareholders are advised to take no further action in relation to the New ATON Mandatory
Offer at this time.
4. INVESTOR CONFERENCE CALL
A conference call will be held at 14h00 on Wednesday, 30 May 2018 to provide Murray &
Roberts shareholders and interested parties with the Independent Boards’ views on the New
ATON Mandatory Offer followed by the opportunity to participate in a Q&A to address any
questions or concerns. Details are as follows:
- Australia: 02 8015 2168
- Johannesburg Neotel: 011 535 3500
- Johannesburg Telkom: 010 201 6700
- UK: 0 333 300 1417
- USA and Canada: 1 508 924 4325
Participants to ask to be joined into the Murray & Roberts Holdings Limited call.
For all other media enquiries, please contact:
Ed Jardim
Group Investor and Media Executive
Murray & Roberts
ed.jardim@murrob.com
5. RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information contained in this
announcement and certifies that, to the best of its knowledge and belief, the information
contained in this announcement is true and nothing has been omitted which is likely to affect
the importance of the information.
Bedfordview
29 May 2018
Financial adviser and transaction sponsor
Deutsche Bank
Legal adviser
Webber Wentzel
Sponsor
Deutsche Securities (SA) Proprietary Limited
Date: 29/05/2018 02:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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