Picture: ISTOCK
Picture: ISTOCK

The Murray & Roberts (M&R) board has not given up on its bid to implement a merger with Aveng despite a Competition Tribunal ruling that appeared to kill off its chances of pushing through the necessary resolution at Tuesday’s shareholders’ meeting.

Asked if it was considering an appeal of the tribunal’s decision, M&R group investor and media executive Ed Jardim said that Tuesday’s meeting would go ahead but that "if we decide to proceed with an appeal, it will be for meetings to be held going forward". Jardim did not specify what meetings.

Given that the tribunal has allowed Aton to vote 50% minus one share at Tuesday’s meeting, it seems unlikely there will be a second shareholders’ meeting on the Aveng transaction.

The M&R board needs to secure 50% shareholder backing for its resolution on Tuesday to take the transaction to the next stage. That stage involves securing the approval of the Takeover Regulation Panel to put the Aveng deal to a shareholder vote. In addition to the 50% shareholder vote at Tuesday’s meeting, the panel said it would consider submissions from M&R shareholders.

On Monday, Aton confirmed to Business Day that it had made a submission to the panel "opposing any approval of what M&R itself acknowledges constitutes frustrating action in the form of the proposed transaction with Aveng".

The likelihood that the proposed Aveng deal is dead in the water did not have much effect on the Aveng share price on Monday. It dipped to a low of 14c but recovered to close unchanged at 16c. The M&R share closed the day virtually unchanged at R17.80, although it was 2% lower at one stage.

In a sign that relations between the two parties remain tense, despite their meeting in Munich last week, M&R said it intended raising "certain material concerns" with the panel relating to Aton’s noncompliance with the recent takeover special committee ruling. M&R said the ruling obliged Aton to pay R17 to all shareholders who sold their shares to Aton at less than the increased offer price.

"Notwithstanding the [takeover special committee] ruling, Aton has not extended the ‘make whole’ adjustment to all M&R shareholders on the same basis as Allan Gray."

On Monday, Aton said it was "very pleased" the tribunal had ruled in its favour. However, the outcome of Tuesday’s meeting was in the balance.

"Aton’s view is that the outcome of the vote on the proposed resolution will be particularly close, especially as M&R, in its own words, has done ‘a lot of work canvassing our shareholders and we believe we’ve got big support’."

Aton said it still believed the Aveng transaction would be highly value destructive to M&R and was materially contrary to M&R’s stated strategy.