GERMAN family-owned Aton, which has made an offer to buy out Murray & Roberts, (M&R) has accused M&R of initiating another “frustrating” action to prevent Aton from exercising “its full rights and voting against M&R’s proposed combination with Aveng”.
This is in connection with M&R’s proposed merger with Aveng, which Aton says is meant to frustrate its own attempts to take over M&R. M&R says the Aton offer is too low. In the latest move, M&R has filed an urgent application before the Competition Tribunal to prevent Aton from exercising its full voting rights in M&R. Aton holds approximately 43.81% of the issued shares of M&R, which translates to approximately 44.06% of the voting rights.
M&R alleges that if Aton votes its full shares it would be pre-implementing its proposed offer before approval of the competition authorities having been granted. Aton says it disagrees with M&R’s claims and intends to oppose the application vigorously. The company has since filed its application for its proposed offer with the Competition Commission and “remains committed to complying with all aspects of South African legislation and, in this matter, specifically the provisions of the Competition Act”.
“Aton was and is not precluded from acquiring and voting shares in M&R as it does not have control over M&R.” The attendance at M&R’s last general meeting in November last year was attended by holders of over 90% of the issued share capital. Since then the composition of M&R’s shareholder base has increased in concentration and thus the attendance level is likely to increase. Given this, while Aton is M&R’s largest shareholder, it would not have a majority of M&R’s shares in a general meeting.
Aton said yesterday they have no intention of pre-implementing a notifiable merger and is of the view that the application made by M&R is unnecessary and without merit. M&R shareholders are expected to meet next Tuesday to vote on M&R’s proposed combination with Aveng.
Legally, M&R requires the approval of shareholders and of the Takeover Regulation Panel to proceed with the Aveng transaction. Aton says it remains “steadfastly against the Aveng transaction” as it would introduce significant risk to M&R and its stakeholders.