Macmahon faces legal challenge to Leighton sale
Indian-based firm Sembawang Australia - a subsidiary of engineering and construction group Punj Lloyd - has instructed its lawyers to file a suit against Macmahon after being denied access to conduct due diligence on the Australian company.
Last week it emerged Sembawang Australia had made an offer to buy Macmahon's construction operations for $25 million, but Macmahon has said it cannot provide Sembawang due diligence access without the permission of Leighton.
Shares in Macmahon Holdings on Tuesday fell 2.7 per cent to 29¢.
Leighton and Macmahon signed off on an asset purchase agreement in December, as Macmahon looks to divest its construction business and become a dedicated full-service mining contractor.
Sembawang chief executive Richard Grosvenor said his company approached Macmahon on November 26 about joint ventures and the potential purchase of its construction business.
But Macmahon has denied this occurred, saying the only offer it had received from Sembawang was its unsolicited, non-binding proposal received on January 3.
"At the time of this announcement, Macmahon has not received any formal notice of legal proceedings having been initiated against it by Sembawang," Macmahon said in a statement.
MacMahon is continuing preparations for an extraordinary general meeting in February, where shareholders will vote on a Leighton deal.
Macmahon has previously said it expects to make just $2 million on the sale to Leighton Holdings due to $12 million in redundancy costs also linked to the sale.
Macmahon warned investors in September that its annual profit would be about half the $56.1 million reported in financial 2012.
Frequently Asked Questions about this Article…
Macmahon is facing a legal challenge from Sembawang Australia after Sembawang was denied access to conduct due diligence on Macmahon’s construction business. Sembawang has instructed lawyers to file a suit against Macmahon over the access dispute related to the proposed sale.
Sembawang Australia is an Indian‑based firm and a subsidiary of engineering and construction group Punj Lloyd. The company emerged as having made a $25 million offer to buy Macmahon’s construction operations, and it says it was blocked from due diligence before pursuing legal action.
Leighton Holdings signed an asset purchase agreement with Macmahon in December. Macmahon says it cannot grant Sembawang due diligence access without Leighton’s permission, and shareholders will vote on the Leighton deal at an upcoming meeting.
Shares in Macmahon Holdings fell 2.7% to 29 cents on Tuesday after news of the legal challenge and the dispute over due diligence access emerged.
Yes. Sembawang’s CEO Richard Grosvenor said his company approached Macmahon on November 26 about joint ventures and a possible purchase, while Macmahon denies that contact and says the only offer it received from Sembawang was an unsolicited, non‑binding proposal on January 3.
Macmahon said in a statement that at the time of the announcement it had not received any formal notice of legal proceedings having been initiated against it by Sembawang.
Macmahon has said it expects to make only about $2 million from the sale to Leighton, largely because it anticipates around $12 million in redundancy costs linked to the transaction.
Macmahon is preparing for an extraordinary general meeting in February where shareholders will vote on the Leighton transaction. That vote is important because it will determine whether the agreed asset sale to Leighton proceeds despite the competing interest and legal dispute.
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