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Independent Board announcement regarding receipt of an updated Independent Expert Opinion and further guidance
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 RECEIPT OF AN UPDATED
INDEPENDENT EXPERT OPINION AND FURTHER GUIDANCE FOR MURRAY &
ROBERTS SHAREHOLDERS IN RELATION TO THE NEW MANDATORY OFFER BY
ATON GMBH (“ATON”)
SALIENT FEATURES
* On 5 June 2018, ATON withdrew its conditional voluntary offer and issued a new
mandatory offer (“Mandatory Offer”) to acquire all of the ordinary shares in Murray &
Roberts that it does not already own.
* The independent board of Murray & Roberts (“Independent Board”) has had an
opportunity to assess the Mandatory Offer in conjunction with its advisers and obtained an
updated independent expert opinion.
* The independent expert’s updated opinion on the Mandatory Offer continues to be that
the offer is unfair but reasonable.
* Having had reference to the independent expert’s updated opinion, the Independent
Board’s view remains unchanged that the fair value price range for control of Murray &
Roberts is between R20.00 to R22.00 per Murray & Roberts’ ordinary share.
* ATON’s increased cash offer price of R17.00 per Murray & Roberts ordinary share
(“Increased Offer Price”) remains below the Independent Board’s fair value price range for
control and is also below the current trading price of Murray & Roberts ordinary shares on
the JSE, which closed at R17.90 on Friday, 15 June 2018 and has traded as high as R19.19
on 4 June 2018.
* The Independent Board remains of the view that ATON is resolved to follow through on
its offer to acquire control of Murray & Roberts. Furthermore, it is obliged to do so in terms
of the Mandatory Offer, unless the offer fails due to non-fulfilment of a condition precedent.
* Accordingly, the Independent Board continues to advise Murray & Roberts’ shareholders
that they have time to evaluate the Mandatory Offer and therefore should take no action in
relation to the Mandatory Offer at this stage. In the event that the Mandatory Offer is
declared unconditional in all respects, ATON is required to release an announcement on
SENS. Murray & Roberts shareholders will still have 10 business days from the date of
such announcement to accept the Mandatory Offer, if they choose to do so, on the terms
offered by ATON at that time. Shareholders wishing to monetise their shareholding in the
Company are currently able to do so on the open market at a higher price than the Increased
Offer Price.
* The Independent Board’s updated response circular setting out the Independent Board’s
recommendation on the Mandatory Offer as currently construed together with other
important information for Murray & Roberts’ shareholders will be posted by no later than
Monday, 2 July 2018.
1. INTRODUCTION
Shareholders are referred to the announcement released on SENS by ATON on Tuesday,
5 June 2018 regarding the formal withdrawal of ATON’s voluntary offer and the posting of
a new offer circular (“Mandatory Offer Circular”), setting out the terms of a new Mandatory
Offer at an increased offer consideration of R17.00 per Murray & Roberts’ ordinary share.
In addition, shareholders are referred to the Independent Board announcement on 28 May
2018 setting out the Independent Board’s preliminary perspectives on the actions taken by
ATON, following the ruling handed down by the Takeover Special Committee (“TSC”) on
Friday, 25 May 2018 (“TSC Ruling”) and also providing important guidance for shareholders
in relation to these developments.
2. UPDATED INDEPENDENT EXPERT OPINION
Following the issue of the Mandatory Offer, the Independent Board requested an updated
independent expert report from BDO Corporate Finance Proprietary Limited (“Independent
Expert”), the appointed Independent Expert to the Independent Board as required in terms
of the Companies Act, 71 of 2008 (“Companies Act”).
Shareholders are advised that the Independent Expert has completed its procedures and
presented its updated findings to the Independent Board. The Independent Expert’s opinion
remains that the Mandatory Offer is unfair at the currently contemplated Increased Offer
Price, but reasonable.
Having considered the updated findings of the Independent Expert, the Independent Board
has affirmed its view that the fair value price range for control of Murray & Roberts is
between R20.00 to R22.00 per Murray & Roberts ordinary share.
The findings of the Independent Expert, including its updated view on a fair value range for
control of Murray & Roberts expressed as a price per Murray & Roberts’ share, will be
published as part of the response circular to be posted to Murray & Roberts shareholders
by the Independent Board by no later than 2 July 2018.
3. IMPORTANT MATTERS IN RELATION TO THE MANDATORY OFFER
3.1. Increased Offer Price and further guidance for Murray & Roberts
shareholders
The Independent Board notes ATON’s Increased Offer Price of R17.00 per Murray &
Roberts’ ordinary share. Shareholders are reminded that ATON strongly advocated for a
period of eight weeks that the original offer price of R15.00 per Murray & Roberts’ ordinary
share represented full value for control of the Company. The voluntary offer was, however,
not declared unconditional as to acceptances at the minimum shareholding threshold of
50% plus one Murray & Roberts ordinary share, prior to it being withdrawn. ATON has
subsequently issued the Mandatory Offer at the Increased Offer Price.
The Increased Offer Price remains below the Independent Board’s fair value price range
for control of R20.00 to R22.00. The Independent Board therefore continues to be of the
view that the Mandatory Offer undervalues the strategic platforms and business prospects
of Murray & Roberts. The Independent Board does not recommend that Murray & Roberts
shareholders accept the Mandatory Offer and therefore should take no action in relation to
the Mandatory Offer at this stage.
The Independent Board remains of the view that ATON is resolved to follow through on its
offer to acquire control of Murray & Roberts. Furthermore, it is obliged to do so in terms of
the Mandatory Offer unless the offer fails due to non-fulfilment of a condition precedent.
Accordingly, the Independent Board continues to advise Murray & Roberts’ shareholders
that they have time to evaluate the Mandatory Offer and assess the actions to be taken by
ATON from here.
In the event that the Mandatory Offer is declared unconditional in all respects, ATON is
required to release an announcement on SENS. Murray & Roberts shareholders will still
have 10 business days from the date of such announcement to accept the Mandatory Offer,
if they choose to do so, on the terms offered by ATON at that time.
The Independent Board will continue to assess ATON’s progress to implementing the
Mandatory Offer and provide guidance to Murray & Roberts shareholders as required.
3.2. Matters raised with the Takeover Regulation Panel (“TRP”)
The TSC ruled that ATON should withdraw its conditional voluntary offer and replace it with
a compliant mandatory offer on the same or similar terms to those contained in the forward
sale agreement (“Forward Sale Agreement”) entered into between ATON and Allan Gray
Proprietary Limited (“Allan Gray”) on 29 March 2018. Confirmation that the conditional
voluntary offer was withdrawn and a process in terms of which withdrawal of prior
acceptances by Murray & Roberts shareholders of the conditional voluntary offer is set out
in the ATON Mandatory Offer circular.
Following the Independent Board’s review of the Mandatory Offer, the Independent Board
intends to raise certain material concerns with the TRP of non-compliance with the TSC
Ruling. The most material of these concerns as it relates to the interests of Murray &
Roberts shareholders are as follows:
3.2.1. Preferential treatment of shareholders
Shareholders are reminded that ATON offered Allan Gray a make whole price adjustment
on any Murray & Roberts ordinary shares sold to ATON by Allan Gray under the Forward
Sale Agreement. In terms of the make whole price adjustment, in the event that ATON
increased the offer price above R15.00, ATON would be obliged to pay Allan Gray the
difference between the increased offer price in respect of any shares that had been sold by
Allan Gray to ATON at R15.00 under the Forward Sale Agreement. Based on the Increased
Offer Price, ATON is currently obliged to pay Allan Gray an additional R2.00 (being the
difference between the Increased Offer Price and the original offer price of R15.00) per
Murray & Roberts ordinary share for every Murray & Roberts share sold to ATON. In the
event that the Increased Offer Price is increased again, ATON will again need to make Allan
Gray whole for any incremental increase.
In terms of the TSC Ruling, the make whole benefit should be afforded to every Murray &
Roberts shareholder that sold their Murray & Roberts shares to ATON at less than the
Increased Offer Price since the date of the Forward Sale Agreement.
Notwithstanding the TSC Ruling, ATON has not extended the make whole adjustment to
all Murray & Roberts’ shareholders on the same basis as Allan Gray, to the prejudice of
those Murray & Roberts shareholders that sold shares to ATON at less than the Increased
Offer Price between 29 March 2018 and the date of the issue of the Mandatory Offer at the
Increased Offer Price on 5 June 2018.
3.2.2. Conditions under the control of ATON
The Mandatory Offer remains subject to certain conditions, the fulfilment of which is under
the control of ATON. This includes, amongst others, ATON’s right to reject any conditions
attaching to a merger clearance or approval in South Africa and other jurisdictions.
Shareholders are advised that it is not possible to accurately predict the timeline for
completion of the regulatory approval process, which may be protracted, especially in the
instance where any or all of the filings are contested. If a condition is not acceptable to
ATON for any reason whatsoever, the approval process may be further delayed, while
ATON seeks an amendment to or the removal of an unsatisfactory condition. The
implication of this is that there may be a significant delay to the timetable as set out by
ATON. During this time, ATON makes no provision for an escalation of the offer
consideration. The ATON Mandatory Offer circular specifies that any extension of dates will
be applied in accordance with the requirements of the TRP and other applicable laws.
4. POSTING OF REPONSE CIRCULAR
The Independent Board is required to post an updated response circular (“Response
Circular”) by no later than Monday, 2 July 2018, as specified in the Takeover Regulations
published in terms of Section 120 of the Companies Act.
The formal recommendation of the Independent Board in relation to the Mandatory Offer
will be set out in the Response Circular.
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
18 June 2018
Financial adviser and transaction sponsor
Deutsche Bank
Legal adviser
Webber Wentzel
Independent expert
BDO Corporate Finance Proprietary Limited
Sponsor
Deutsche Securities (SA) Proprietary Limited
Date: 18/06/2018 10:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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