Tuesday, 15 January 2013 09:37
Mining support contractor Macmahon Holdings has rejected a $25 million takeover offer from India-owned Sembawang Australia.
Macmahon announced late on Monday it had rejected the buy-out of its construction business because Sembawang had failed to provide information requested by Macmahon's board and that there was an "uncertainty and risk" associated with the takeover.
It also accused Sembawang of "inconsistent conduct, including its breach or normal commercial confidentiality".
Macmahon is looking to become a dedicated full service mining contractor, and in December struck a $20 million deal with its biggest shareholder Leighton to sell its construction projects, including equipment and staff, with the exception of some assets and its rail business.
But Sembawang has since made a two-part rival offer to the Leighton agreement.
The first offer - to buy all of Macmahon's construction businesses - lapsed over the weekend.
But the second offer - to replicate the deal with Leighton but for an additional $5 million - remained in play.
Sembawang on Monday requested Macmahon accept its proposal before 2000 AEDT on Tuesday and grant access to due diligence.
"Sembawang wishes to proceed with the transaction on the exact same terms as those entered into with Leighton, however, Sembawang is offering a further $5 million as purchase consideration," it said in a letter to Macmahon's board.
But Macmahon on Monday issued a statement saying, that Sembawang's proposal was not in the interests of its shareholders.
Macmahon has previously said it cannot grant Sembawang due diligence without the consent of Leighton.
Macmahon shares closed 1.9 per cent higher at 26.5 cents, before Macmahon made its announcement rejecting the Sembawang offer.
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