BESIX to lift stake in Watpac

The single largest shareholder in Watpac has struck a deal to acquire a majority stake in the contracting and construction company, which today reported an interim loss of $1.4 million.

Private Belgian company Besix Group has entered an agreement with Watpac to acquire 50 per cent of the shares it does not already own, for a cash price of 92 cents per share.

The scheme would lift Besix’s stake from 28.1 per cent to 64.1 per cent, and values Watpac at $168.7 million.

The offer price is at a 40 per cent premium to Watpac’s three-month average price.

Watpac’s independent directors have recommended shareholders vote in favour of the proposal.

The expected benefits include Watpac gaining access to Tier 1 and more complex building projects, enhanced technical capabilities and opportunities to diversify.

The proposal was unveiled on the same day Brisbane-based Watpac announced it had slumped to a $1.4 million loss for the half year to December 2017, from a $0.6 million profit in the prior corresponding period.

Its east coast construction business posted a pre-tax profit of $9.2 million on revenue of $524 million.

However, its civil and mining division, which has operations in Western Australia and traded at Watpac Civil & Mining, posted a pre-tax loss of $3 million on revenue of $47.5 million.

Managing director Martin Monro said the construction business had continued to perform profitably over the past six months.

He said the disappointing result in the civil and mining business reflected the lower levels of work completed as several large projects neared or reached completion.

The group’s financial positioned remained strong with gross cash and deposits totalling $256 million at balance date.