CIMIC makes hostile play in Sedgman takeover

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CIMIC, owner of contractors Leighton and Thiess, has made a move to acquire 100 per cent of Sedgman.

CIMIC today announced its intention to acquire the business, of which it is already a major stakeholder with 36.99 per cent of issued stock.

It has put forward $1.07 in cash per Sedgman share as a final offer – a $256 million bid – which is a 35.4 per cent premium on Sedgman's  closing price of $0.79 share value and market cap of $185 million yesterday.

As part of the deal CIMIC intends to change the Sedgman board and continue its plans to diversify its commodity focus, as well as retain all current employees or move them to alternative employment in CIMIC.

Sedgman has begun diversifying its commodity focus, moving from coal into different commodities, and last year was awarded a $145 million contract to provide the engineering procurement construction and commissioning work for BHP's Jimblebar iron ore mine’s new primary crusher. 

Sedgman has advised its shareholders to ignore the bid for the time being.

“At this time the Sedgman board recommends that shareholders take no action in relation to their shares of the offer,” it said in a company statement.

“The Sedgman board has formed a sub-committee, comprising the current directors but excluding the CIMIC nominee director, to consider the offer and will provide its recommendation to shareholders once it has done so.”

In the meantime it has appointed Citi as its financial advisor and Norton Rose Fulbright as its legal advisor.

Credit Suisse and MinterEllison are acting as the financial and legal advisors, respectively, for CIMIC.