German investment company ATON has increased its offer price to Murray & Roberts (M&R) shareholders to R17 a share from R15 previously and the family-owned group has also confirmed that it will convert its voluntary offer to a mandatory one.

ATON’s announcement follows a two-day hearing of the Takeover Special Committee (TSC), which was convened to adjudicate respective complaints by ATON and M&R’s independent board.

ATON, which is M&R’s largest shareholder, with 43.7% holding, said in a statement that the TSC ruling “substantively upholds” its offer and improves its quality.

“[The] converted offer provides even higher certainty of implementation of ATON’s offer,” the company said, while stressing that the offer represented a 77.3% premium to the last closing price, a 53.8% premium to the 90-day volume weighted average price (VWAP) and a 35.7% premium to the three- year VWAP.

“The price should be viewed in the context of M&R share price performance, which closed at or below R10 a share on more than 100 occasions in the three years prior to ATON’s offer.”

The TSC ruling also dealt with the “frustrating actions” of the M&R independent board and the conduct of CEO Henry Laas, which ATON said confirmed its concerns.

The ruling, ATON said, confirmed its view that the independent board’s rejection of the offer had been made “with undue haste and contravened frustrating action provisions of the Companies Act”. “Nevertheless, ATON was and remains open to engage with the independent board.”

ATON also noted that Laas had been ordered to refrain from making any public statements regarding or concerning the offer.

The TSC ruling and the higher mandatory offer follow on from an announcement by M&R and Aveng that the two companies intended pursuing a combination, whereby M&R would acquire the entire issued share capital of Aveng, while facilitating the early redemption of R2-billion-worth of Aveng convertible bonds.

ATON, which immediately rejected the proposed transaction as a frustrating action, reported that it had received unsolicited inbound enquiries and heightened interest by institutional shareholders in ATON’s offer following M&R’s announcement of its intended acquisition of Aveng.

“As a result ATON has increased its shareholding in M&R to around 44% [and] three of M&R’s larger shareholders have now sold shares to ATON in the context of the offer.”

M&R’s independent board said it was aware of the TSC ruling and revealed that it had sought to engage with ATON prior to the release of their announcement.

“The independent board is encouraged by the TSC’s ruling, the re-issue of the voluntary offer as a mandatory offer and the elimination of the unfair treatment of M&R shareholders. The independent board will study the announcement and provide further guidance to shareholders and the market shortly.”

Meanwhile, in a statement to its shareholders, Aveng said that, despite recent developments, its board remained of the opinion that there was merit in the potential combination of Aveng and M&R.

“The Aveng board is therefore continuing to engage with the M&R board and will continue progressing the M&R transaction.”

Aveng also confirmed that it remained committed to the implementation of a proposed rights offer to meet its interim liquidity requirements.