20/08/2008 - 12:48

Ausdrill rejects new Macmahon offer

20/08/2008 - 12:48

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Ausdrill Ltd has rejected Macmahon Holdings Ltd's increased takeover offer, saying the new bid represented less value for shareholders than the original offer.

Ausdrill Ltd has rejected Macmahon Holdings Ltd's increased takeover offer, saying the new bid represented less value for shareholders than the original offer.

Earlier today Macmahon lifted its scrip offer from 1.45 of its shares to 1.65 shares for each Ausdrill share and said the offer was final subject to any competing proposal.

"Macmahon's final offer of 1.65 Macmahon shares is $0.14 per share or 5% lower than the value of the initial offer at announcement," Ausdrill chairman Terry O'Connor said.

"This is a consequence of Macmahon's share price falling 16.8% over this period and reflects the uncertain value of Macmahon's shares.

"Since Macmahon announced its offer 13 weeks ago, it has received acceptances for less than 1% of Ausdrill shares."

"The Board is pleased that Macmahon's offer is now final so that shareholders can reject it and Ausdrill can continue to capitalise upon its outstanding growth opportunities in Australia and Africa for the benefit of our shareholders."

Mr O'Connor added that under the revised offer, Ausdrill shareholders would still only own 34.5 per cent of the combined group, despite the company contributing 55 per cent of the group's net tangible assets and 43 per cent of combined earnings.

Macmahon is targeting Ausdrill to gain a greater foothold in Africa and create a diversified mining contracting and civil construction company with a market capitalisation of $1.4 billion.

Ausdrill said directors and other shareholders holding 25 per cent of the company had stated they would not accept the offer.

The news follows Macmahon's announcement of a 10 per cent increase in net profit for the 12 months to June 30 of $48.7 million.

Macmahon expects its profit for this year to grow at the higher end of its 20 to 30 per cent guidance range.

"Macmahon already has $1.2 billion of revenue secured for the 2009 full year and, as per previous guidance, is expecting to deliver annual profit growth of 20 to 30 per cent," the company said.

"Subject to the timing of new work, 2009 full year profit growth is likely be at the higher end of the 20 to 30 per cent range."

Macmahon said its outlook remained strong, with the company positioned to continue to benefit from the ongoing demand for mining and construction services, both within Australia and overseas.

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