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German billionaire’s company abandons Murray & Roberts takeover

Oct 01 2019 10:39

The German conglomerate Aton, owned by the billionaire Lutz Helmig, has given up on its hostile bid to buy Murray & Roberts [JSE: MUR].

Apart from being one of the largest engineering firms in the country, Murray & Roberts owns 50% of the Bombela Concession company, which operates the Gautrain rail service. But Aton was thought to be particularly interested in M&R's mining business. Through its shareholding in other companies, including Redpath SA, Aton provides a range of mining services in sub-Saharan Africa.

Munich-based Aton is owned by Helmig and his family. A medical doctor, Helmig started one of the largest European private medical groups, Helios Hospitals.

Aton owns around a third of M&R and last year, launched a bid to buy M&R. M&R’s board fought back against the bid, claiming that the offer was opportunistic and “made at a time of unprecedented share price weakness”.

It also said that the offer price (which eventually came to R17 per share) “materially undervalues the company based on its prospects”.

In a statement on Monday evening, Aton said that it abandoned the takeover given the M&R board’s refusal to support the offer as well as the Competition Commission’s ruling against  the proposed merger between Aton and M&R.

In its investigation into the acquisition, the Commission found that the parties are "close competitors". "This transaction will, for both parties, result in the removal of their closest and strongest competitor," the Commission said.

“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 intends to remain invested in and support M&R as a significant shareholder.

By Tuesday mid-morning, M&R's share price was down 4% to R12.66 following the news.

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