Murray & Roberts currently owns 61.6% of Australian listed Clough Limited (Clough) and announced its intention to acquire all of the remaining ordinary shares in Clough.
Henry Laas, Murray & Roberts Group Chief Executive comments: “Our vision is to establish Murray & Roberts as the leading engineering and construction Group in its selected markets. The Recovery & Growth strategy that was developed two years ago, provided for Recovery in FY2012 and Growth in FY2013 and FY2014. We will end FY2013 having successfully negotiated the Recovery phase in FY2012 and having accomplished all significant milestones in the first of our two Growth years. To support our long term growth objective we redefined the market sectors on which we wish to focus. Broadly stated, we have identified energy (oil & gas and power) and mining and minerals as the sectors presenting the best medium-to-long-term growth opportunity, and which will most likely enable us to deliver the returns our shareholders expect. This proposed acquisition is strategically compelling, consistent with our long term growth plans and the next logical step to fulfil our strategic objectives.”
Following the recent disposal by Murray & Roberts of its manufacturing businesses, the proposed transaction;
- Creates a focussed international diversified engineering and construction business, leveraging respective capabilities and management competencies across Australasia, South East Asia and Africa;
- Increases Murray & Roberts’ exposure to target market sectors which are considered to present long term growth potential;
- Allows Murray & Roberts and Clough to better leverage Clough’s oil & gas capabilities and expertise into opportunities in Africa;
- Creates a strong platform for further expansion of Murray & Roberts’ international business;
- Secures control of 100% of the operations, assets, cash flow and strategic direction of Clough,
- Is expected to be immediately Earnings Per Share accretive, and
- Simplifies the corporate and operating structure of the consolidated Group.
The consideration for the proposed acquisition will be 100% cash and is expected to include both a cash capital component and a fully franked dividend component payable by Clough with the franking credits providing additional value to eligible shareholders. Murray & Robert’s proposed offer provides an attractive premium to the recent trading price of Clough shares to Clough minority shareholders. Murray & Roberts intends to fund the proposed acquisition through a combination of existing cash, cash on Clough’s balance sheet and modest acquisition financing. The proposed acquisition is intended to be implemented by way of a scheme of arrangement under the Australian Corporations Act.
Following execution of this proposal and redeploying available funds from the recent asset divestments, Murray & Roberts’ consolidated gross debt position is expected to remain largely unaffected.
The proposed transaction is subject to;
- final approval by Murray & Roberts following the satisfactory completion of confirmatory due diligence;
- the negotiation, finalisation and execution of a Scheme Implementation Agreement between Murray & Roberts and Clough; and
- a unanimous recommendation by Clough independent directors in support of the transaction (subject to an Independent Expert determining that the transaction is in the best interests of Clough shareholders, and no superior proposal emerging.)
Subject to the conditions above being satisfied, the Clough independent directors have indicated that they intend to unanimously support the transaction.
“The proposed acquisition is finally subject to a period of engagement with and approval by both Murray & Roberts and Clough shareholders. Murray & Roberts has had a long association with Clough since initially acquiring a shareholding in 2003. Clough, as a leader in the Australasian energy, chemicals, mining and minerals sectors, is an integral part of the Group’s strategy,” concludes Laas.