Public Investment Corporation (PIC), the South African quasi-public investment entity with over R1.928 trillion (over $160 billion) of assets, rejects German company ATON’s offer to acquire the company.
Last month, ATON, the second biggest shareholder by over a third in Murray & Roberts (M&R), made a buyout offer of 15 rand ($1.3) per share for M&R. This offer valued PIC at almost $600 million and the engineering firm construction firm rejected the offer saying it was under valued.
“The PIC does not support the current offer and agrees with the Board of Murray and Roberts that the offer by Aton materially undervalues this successful engineering, construction and mining company based on its prospects,” PIC noted, according to a statement in Reuters.
Initially when ATON offered a buyout, M&R rejected it saying it was an opportunistic move and it is reluctant to sell cheaply after it has spent billions transforming itself from a local builder to a multinational firm with operations in other African countries.
M&R has evolved into a group focused on the global natural resources sector, though it has been under pressure for nearly a decade because its order book has been hit badly by the weak South African economy.
With time M&R’s profits from its underground mining activities more than doubled after it sold its Middle East business that has not been making profit in 2017.