Macmahon Holdings have hit back at construction company Sembawang’s latest effort to purchase its construction business saying the latest proposal is not superior to the Leighton’s deal.
In a statement Macmahon yesterday released the company said Sembawang’s $35 million proposal made on February 13 was not capable of being practically implemented.
It also said the offer requires Macmahon to retain significant exposure and risk as an ongoing contracted party to the construction projects, and at only .4 cents more per share the risk was not worth the reward.
Macmahon warned its shareholders that “a vote against the sale to Leighton will potentially expose the company to very significant project losses (well in excess of the $5.4 million difference in offer prices) with the potential loss of key staff given their uncertain future”.
Following Sembawang’s offer earlier this month Macmahon’s independent directors met with the Sembawang executives on February 15 to flesh out the latest proposal.
The result was a unanimous rejection of the offer by Macmahon’s independent directors, who cited Sembawang’s lack of operational presence in Australia, and the deficiency of a clean exit for Macmahon from its construction projects.
In response Sembawang today released an open letter to Macmahon’s board and shareholders in an effort to openly communicate and demonstrate “transparency and accurate disclosure”.
The Singaporean based firm said it proposes now to acquire Macmahon’s construction division as a going concern for a fair price determined by an independent third party.
“Sembawang’s offer to buy Macmahon’s construction business will provide substantially more value to Macmahon shareholders than Lerigton;s offer,” Sembawang stated.
The company also pushed for Macmahon shareholders to vote against the resolution to take Leighton’s offer at the general meeting scheduled for February 26.
This ‘toing and froing’ between Sembawang and Macmahon kicked off late last year when Macmahon announced they were shifting focus towards becoming a mining services company and had entered an Asset Purchase Agreement for their construction business with their largest shareholder Leighton Holdings.
Semabwang subsequently made a number of offers to acquire the construction company, which were unanimously rejected by Macmahon, citing “the conditional nature of the proposal and the other uncertainties relating to Sembawang’s ability to complete the transaction with Macmahon”.