CIMIC takeover tussle with Macmahon intensifies

Image: Macmahon Holdings

The back-and-forth takeover battle between leading contractor CIMIC and its target Macmahon Holdings continues as the suitor’s bid edges towards closing next week.

After Macmahon attempted to thwart the acquisition plans of the larger contractor earlier this week when it unveiled a deal of its own with Indonesia’s PT Amman Mineral Nusa Tenggara (AMNT), CIMIC again urged its target’s shareholders to accept the 14.5 cent per share offer it made in January.

Macmahon’s deal with AMNT would see the Perth-based contractor receive $US150 million worth of mining equipment in exchange for the Indonesian miner taking up to 50.1 per cent of its shares. Macmahon would also receive a significant mining contract at the Batu Hijau coper-gold operation in Indonesia through the agreement.

CIMIC yesterday described Macmahon’s proposed deal with AMNT as “reactive, rushed and defensive.”

In downplaying the deal, CIMIC added that the asset proposal was highly conditional, it increased Macmahon’s risk proposal, it paid no cash, and the profitability of the mining contract was unknown.

CIMIC’s unconditional offer for Macmahon closes on March 9 and will not be extended or increased, it said.

Macmahon today returned fire, backing the AMNT transaction by saying it aimed to increase the scale, operational diversity, revenue and order book, profitability and growth prospects of the company.

The CIMIC offer, which valued the target at about $175 million, was “inadequate and opportunistic”, and did not reflect an improved outlook for Macmahon, it added.

“CIMIC has repeatedly criticised Macmahon’s performance, directly contradicting its desire to own Macmahon,” the company stated.

Spanish-controlled CIMIC currently owns about 23 per cent of Macmahon.

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