The board of engineering and construction group Murray & Roberts (M&R) has again guided shareholders not to accept ATON’s mandatory offer of R17 a share, which it argues undervalues M&R’s strategic platforms and business prospects.

The board made the statement in a circular response to ATON’s mandatory offer, posted to M&R shareholders on Monday, July 2.

ATON made its mandatory offer on June 5, after the German group’s initial voluntary offer of R15 a share was withdrawn in the wake of a Takeover Special Committee ruling.

In its circular, the M&R board reiterated its stance that the cash offer remained below its assessed fair-value price range for control of between R20 and R22 a share.

M&R shares closed at R17.51 on Friday, June 29.

The battle for M&R has become one of the most hotly contested in South Africa’s recent corporate history, with the M&R board not only rebuffing the offer, but also backing a possible combination of M&R with fellow JSE-listed group Aveng.

The proposed Aveng transaction was made only after the initial approach by ATON, which lambasted the proposed tie-up as a frustrating action.

However, M&R shareholders approved a resolution in late June, stating that the proposed Aveng deal was not designed to frustrate ATON’s bid to acquire M&R. The Takeover Regulation Panel subsequently sanctioned the vote, opening the way for M&R to move ahead in developing the transaction further.

The M&R board announced on June 21 that it would advance its preparations for the Aveng deal, but stressed that the proposed transaction would proceed only once several preconditions were met, including the completion of a due diligence review of Aveng.

For its part, ATON, which holds around 44% of M&R, continues to voice its opposition to the proposed Aveng deal, which it argues contradicts M&R’s stated strategy and could undermine M&R’s financial position.

On July 2, the independent board noted that ATON was obliged to follow through on its offer to acquire control of M&R by way of the mandatory offer, unless the offer failed as a result of a non-fulfilment of a condition precedent.

The independent board recommended that M&R shareholders refrain from accepting ATON's mandatory offer.