South African builder Murray & Roberts has made a takeover bid for Clough that values the West Australian engineering company at more than $1.1 billion. Murray & Roberts, which owns 61.7 per cent of the firm, said it would acquire Clough's remaining shares at $1.46 cash a share.
Shares in Clough, which was established in 1919, closed 28 per cent higher at $1.43 on Wednesday.
Clough chairman Keith Spence said the proposal was an opportunity for shareholders to "realise a premium value for their investment".
"Murray & Roberts has indicated that they do not intend to make any material changes to the operations or management of Clough. They have been strongly supportive of the management of Clough and their strategic plan," he said.
He said if due diligence checks and the approval of the Murray & Roberts board were met, Clough's independent directors would unanimously support the takeover bid.
RBS Morgans analyst Alexandra Clarke said Murray & Roberts' proposal appeared to be "reasonable". She said Clough was sitting on about $364 million in cash after selling a marine construction business and its 36 per cent stake in engineering services company Forge.
The $1.46 will comprise a $1.32 cash payment from Murray & Roberts and a 14¢ fully franked dividend from Clough.