Aveng’s share price fell 13% to 33c on Tuesday following an update on its negotiations with Murray & Roberts (M&R).

The tone of Aveng’s statement was that while it would have liked to have been bought by M&R, the deal was inevitably going to be trumped by German investment group Aton’s hostile takeover of M&R.

Aveng reminded its shareholders that Aton, whose stake in M&R has risen to nearly 44%, "has also previously released a public statement stating that it will not support the M&R transaction".

At 33c per share, Aveng’s market capitalisation was just R137.5m. M&R was trading at R17.06, giving it a market cap of R7.6bn.

Aveng advised shareholders that it intends to proceed with a proposed rights offer in which it hopes to raise up to R500m.

"M&R is supportive of Aveng proceeding to implement the proposed rights offer, irrespective of whether the M&R transaction proceeds or not," Tuesday’s statement said.

The construction group said it was also continuing with its previously announced plan to sell various subsidiaries, including Aveng Grinaker-LTA, Aveng Trident Steel, Aveng’s manufacturing businesses, and other properties. It said this would allow "management to focus on the core operations of Moolmans and McConnell Dowell".

When M&R announced its proposal to acquire Aveng in an all share deal, it said: " The combination of M&R’s oil and gas and underground mining platforms, with Aveng’s McConnell Dowell and Moolmans businesses, is compelling and will establish a large multi-national engineering and construction group."

Aveng said on Tuesday that its board "remains of the opinion that there is merit in the potential combination of Aveng and M&R, and believes that such a potential combination is in the best interest of the company and its stakeholders. The Aveng board is, therefore, continuing to engage with the M&R board and will continue progressing the M&R transaction."

Without Aton’s support, the deal appears unlikely to proceed.

On Monday, Aton upgraded its proposed offer of R17 a share to a firm offer, and also said it had obtained a gagging order on M&R CEO Henry Laas, prohibiting him from attempting to dissuade shareholders from accepting its offer.