Saturday, 05 January 2013 08:25
Macmahon Holdings says an existing agreement to sell its construction operations to Leighton Holdings means it is unable to let an Indian based bidder conduct due diligence on the assets.
It emerged on Thursday Sembawang Australia - a wholly-owned subsidiary of engineering and construction group Punj Lloyd - made an offer to buy Macmahon's construction operations for $25 million.
The offer was made in two parts, with Sembawang to either purchase the construction business as a going concern, or as a counter proposal to Leighton's $20 million offer plus an additional $5 million.
Sembawang said the offer was the subject of satisfactory due diligence and board approval by 31 January 2013.
Macmahon said in a statement to the Australian Securities Exchange on Friday it could not provide Sembawang access to conduct due diligence without Leighton's permission.
Leighton and Macmahon had executed an asset purchase agreement in December, which meant that Macmahon "cannot without Leighton's prior consent provide Sembawang with due diligence access".
Macmahon said in December it would sell its construction activities to Leighton Holdings for $20 million and become a dedicated full service mining contractor.
Leighton owns about 24 per cent of Macmahon and is the company's largest shareholder.
While the effective date of the sale was 31 December 2012, the transaction required shareholder approval, with a vote due to be held at a Macmahon extraordinary general meeting scheduled for February.
Macmahon said the Sembawang bid was unsolicited, non-binding, incomplete, conditional and "limited in detail".
"Macmahon will continue to keep its shareholders and the market informed of any developments in accordance with all legal and regulatory requirements," the company said.
Sembawang president and CEO Richard Grosvenor said on Thursday the two companies were a strategic fit.
"Sembawang has always been eyeing Macmahon's construction business for over four years now and believe that the time is right to make this offer," Mr Grosvenor said in a statement.
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