04/09/2008 - 13:00

Ausdrill attacks Macmahon's share price

04/09/2008 - 13:00

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Ausdrill Ltd has today attacked its hostile suitor's share price as it continued to uphold its rejection of the takeover bid by Macmahon Holdings Ltd.

Ausdrill Ltd has today attacked its hostile suitor's share price as it continued to uphold its rejection of the takeover bid by Macmahon Holdings Ltd.

In its second supplementary target statement today, Ausdrill chairman Terry O'Connor said the unexplained volatility of Macmahon's recent share price is cause for concern.

"We're concerned not only with the relative value of Macmahon's shares being offered to Ausdrill shareholders, but also the sustainability of Macmahon's current share price and therefore the uncertain value of the offer," he said.

Ausdrill said that in the past 12 trading days, Macmahon shares have traded from $1.48 to $1.84. As a result, the implied value of the offer has varied significantly.

Last month Macmahon increased its offer to 1.65 of its shares for each Ausdrill share, valuing the shares at $3.05. Shares in Ausdrill today closed down 10c to $2.5.

"There is no certainty Macmahon's shares will continue to trade at current levels given recent volatility, so the implied value of the offer is extremely uncertain," Mr O'Connor continued.

"Macmahon is currently trading at close to its highest share price in the last 20 years. We believe Macmahon's volatility will continue and, as a result, Ausdrill shareholders may not realise the value of the offer following acceptance."

Mr O'Connor added that the company now has written confirmations from shareholders representing 28.1 per cent of Ausdrill shares who say they will reject the bid.

The figure was previously about 25 per cent.

Yesterday Macmahon said it had received acceptances from Ausdrill shareholders representing 9.36 per cent of the company's stock.

Ausdrill has continuously said the takeover offer undervalued the company and exposes shareholders to significant risks and uncertainty.

The offer is due to close on September 16.

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