South Africans move to buy remaining shares in Clough
Murray & Roberts, which owns 61.7 per cent of the firm, said it would acquire Clough's remaining stock at $1.46 cash a share.
Shares in Clough, which was established in 1919, jumped 28 per cent to $1.43 on Wednesday.
Clough chairman Keith Spence said the offer 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 added that if conditions such as 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 on a multiples basis, the South Africans' proposal appeared "reasonable".
She said it was unlikely that the WA firm, which manages oil and gas projects in Australia and south-east Asia, would receive another offer as any suitor would have to pay a large premium to take out Murray & Roberts, although the Clough board has left such an option open.
Ms Clarke noted that Clough was sitting on $364 million in cash after selling a marine construction business and its 36 per cent stake in engineering services company Forge. Its list of clients includes Chevron's Wheatstone and Gorgon projects, and Woodside's Pluto.
"The argument could be made that it is slightly opportunistic, given Clough's cash balance," she said. "The market had been waiting for Clough to make an acquisition given its large cash balance. Murray & Roberts will now be a beneficiary of the remaining cash post the 14¢ dividend."
The $1.46 will comprise of a $1.32 cash payment from Murray & Roberts and a 14¢ fully franked dividend from Clough.
The dividend could include up to an additional 6¢ a share for shareholders able to use the franking credit.
Frequently Asked Questions about this Article…
Murray & Roberts has made a takeover bid that values West Australian engineering company Clough at more than $1.1 billion, offering $1.46 cash a share for the remaining stock.
The $1.46 offer comprises a $1.32 cash payment from Murray & Roberts plus a 14¢ fully franked dividend from Clough. There could be up to an additional 6¢ a share available for shareholders who can use the franking credit.
Clough shares jumped 28% to $1.43 on the day the bid was announced, reflecting strong market reaction to the $1.46 offer.
Murray & Roberts already owns 61.7% of Clough. The bidder has indicated it does not intend to make any material changes to Clough’s operations or management.
Clough chairman Keith Spence said the takeover is an opportunity for shareholders to realise a premium, and he stated that if conditions such as due diligence and Murray & Roberts board approval are met, Clough’s independent directors would unanimously support the bid.
Yes. Clough was reported to be sitting on $364 million in cash after selling a marine construction business and its 36% stake in engineering services company Forge. RBS Morgans analyst Alexandra Clarke noted the bid could be seen as slightly opportunistic given Clough’s cash balance.
RBS Morgans analyst Alexandra Clarke said the South Africans’ proposal appeared "reasonable" on a multiples basis. She also said it was unlikely Clough would receive another offer because any rival would need to pay a large premium to buy out Murray & Roberts, although the Clough board has not ruled out that possibility.
Clough manages oil and gas projects in Australia and southeast Asia. Its client list includes major projects such as Chevron’s Wheatstone and Gorgon projects and Woodside’s Pluto.
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