August 2, 2018 / 2:19 PM / 2 months ago

UPDATE 1-South African regulators prohibit Murray & Roberts from seeking Aveng tie-up

(Changes lead, adds Aveng asset disposal, share price)

JOHANNESBURG, Aug 2 (Reuters) - Murray & Robert’s biggest shareholder ATON has won an appeal from regulators, allowing it to block the construction firm’s proposed merger with peer Aveng, Murray & Roberts said on Thursday.

Murray & Roberts said in a statement the approval it had originally obtained from the Takeover Regulation Panel (TRP) to look into a potential tie-up with Aveng while it was still the subject of a hostile takeover by ATON was overturned on Wednesday.

This comes after ATON submitted an appeal to the Takeover Special Committee (TSC) requesting TRP approval be overturned.

“The board is in the process of reviewing the TSC ruling together with its legal advisers and consulting with Aveng. The board will make a further announcement regarding the proposed transaction in due course,” it said.

In a separate statement Aveng said it noted Murray & Roberts’ intention to engage further with the company but had not received any formal correspondence from Murray & Roberts.

ATON was not immediately available for a comment.

Murray & Roberts has been in a tug of war with its top investor ATON since March when the German investment house launched a takeover bid, which was rejected as poor value for shareholders.

Murray & Roberts then proposed an all-share merger with rival Aveng in May, which ATON called a “poison pill” and a “frustrating” action.

To prevent the potential merger between Aveng and Murray & Roberts, ATON bought a 25.42 percent stake in Aveng.

Shares in Aveng tumbled 11.11 percent to 8 cents at 1413 GMT, while Murray & Roberts was down 1.28 percent to 17.70 rand.

Separately, Aveng said it had agreed to sell two of its properties, Jet Park and Van der Bijl Park for 211.2 million rand ($15.78 million) and 42.6 million rand respectively, as part of a strategic review to lower a debt burden and strengthen its financial position.

The construction industry in South Africa has experienced challenging trading conditions, resulting in deteriorating profitability in Aveng, significantly reduced earnings, declining share prices and unsustainable debt levels.

In February it announced its intention to dispose of non-core assets including Aveng Grinaker-LTA, Aveng Trident Steel, the Aveng Manufacturing businesses and properties, allowing management to focus on the core operations of Moolmans and McConnell Dowell. ($1 = 13.3836 rand) (Reporting by Nqobile Dludla, editing by Pritha Sarkar/David Evans)

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