Macmahon Holdings Ltd has warned of potential falls in Ausdrill Ltd's share price as shareholder support for the takeover wanes.
Macmahon Holdings Ltd has warned of potential falls in Ausdrill Ltd's share price as shareholder support for the takeover wanes.
Macmahon said Ausdrill shareholders faced a "stark choice" between accepting the takeover offer from Macmahon, worth about $3, or hold onto shares which have fallen from a high of around $2.65 when the takeover was launched in May to its last trading price of $2.11.
Macmahon attributed the share price fall to purchases made by Ausdrill's managing director Ron Sayers who now holds a 19.9 per cent stake in Ausdrill.
"New share purchases by Mr Sayers have had the effect of sending the Ausdrill share price tumbling and the market appears to have interpreted this as a sign Macmahon's takeover offer may struggle to succeed," Macmahon said in a statement.
"However, Macmahon's position remains that it will consider declaring its takeover offer for Ausdrill free of conditions if it receives sufficient acceptances this week from retail and institutional shareholders."
Macmahon today said it has acceptances and shares in the institutional acceptance facility representing 13.9 per cent of Ausdrill's issued capital, down from the previous announcement of 15.43 per cent.
Macmahon is offering 1.65 of its shares for each Ausdrill share. The takeover offer is scheduled to close on September 29.
Below is the full announcement:
Ausdrill Limited ("Ausdrill") shareholders face a stark choice this week between accepting a takeover offer from Macmahon Holdings Limited ("Macmahon") worth approximately $3 or sticking with their existing shares worth approximately 30% less, with the potential for further falls in their share price.
Ausdrill shares fell sharply last week as a result of purchases by the company's managing director Ron Sayers, who now personally controls a stake of 19.9%.
New share purchases by Mr Sayers have had the effect of sending the Ausdrill share price tumbling and the market appears to have interpreted this as a sign Macmahon's takeover offer may struggle to succeed.
However, Macmahon's position remains that it will consider declaring its takeover offer for Ausdrill free of conditions if it receives sufficient acceptances this week from retail and institutional shareholders.
As of today, Macmahon has acceptances and shares in the Institutional Acceptance Facility representing 13.9% of Ausdrill's issued capital.
"There remains the chance that acceptances through this week will be sufficient for Macmahon to declare our offer unconditional," said Macmahon Chief Executive Officer Nick Bowen.
"We are hoping shareholders will look at the fall in Ausdrill's share price and reach the same conclusion as those institutions who are supporting our offer - that the Macmahon offer represents a great opportunity to secure certainty and value for their investment.
"The alternative is for the offer to lapse and for Ausdrill shareholders to be locked into lower value, minority positions. That won't be good for their pockets, especially in a volatile market."
