Engineering and infrastructure company GRD has become the latest acquisition target for UK-based AMEC, which has proposed a $106 million cash takeover offer.
Engineering and infrastructure company GRD has become the latest acquisition target for UK-based AMEC, which has proposed a $106 million cash takeover offer.
Perth-based GRD said it has received a non-binding proposal of 55 cents cash for each of its shares, valuing the proposal at $105.8 million.
Shares in GRD closed up nine cents at 50 cents today, after touching a high of 54 cents.
AMEC has already undertaken due diligence on both GRD's successful engineering subsidiary GRD Minproc and the Lancashire waste project in England.
"However, the proposal remains conditional in a number of respects including completion of due diligence in relation to GRD and negotiating and executing a binding implementation agreement," the company said.
The proposal comes less than two weeks after chief executive Cliff Lawrenson told shareholders at GRD's general meeting that the company was keeping a tight rein on spending.
He said GRD was being selective about taking on projects and was keeping an eye out for evidence the global downturn was impeding a clients' ability to pay bills.
The cautious words follow a reduction in GRD's personnel by around half, frozen salaries, tightened discretionary spending and the suspension of its final dividend in a bid to cut costs and reduce debt.
GRD reported a $62.3 million net loss for calendar 2008, largely attributable to a $58 million hit from the sale of its loss making Eastern Creek waste facility.
The company has also halted growth plans in the UK, where it is involved in the Lancashire waste facility.
GRD said today it is continuing negotiations with AMEC in relation to the proposal.
A GRD spokesperson told WA Business News that the company will not be making further comment on the proposal until a binding agreement has been signed.
Earlier this year, AMEC was awarded the contract for the offshore front end engineering and design for Inpex's Ichthys liquefied natural gas project in the Browse Basin.
AMEC has been on the hunt for acquisitions this year, with its cash reserves expected to be impacted by ₤30 million ($A61 million), taking its forecast cash reserves for this financial year to ₤670 million ($A1.36 billion).
Earlier this month, AMEC acquired the assets and ongoing operations of Canadian mining and environmental engineering company Journeaux, Bedard & Assoc Inc.
Two years ago, GRD founder Brettney Fogarty pocketed $120 million from the sale of his 30 per cent stake, with the Seven Network and Macquarie Bank buying about 10 per cent each.
The announcement is below:
GRD Limited (GRD) has received a proposal from AMEC plc (AMEC) for the acquisition of all of the shares in GRD for a cash offer price of $0.55 per share.
In formulating its proposal, AMEC has undertaken due diligence in relation to both GRD Minproc and the Lancashire Waste Project. However, the proposal remains conditional in a number of respects including completion of due diligence in relation to GRD and negotiating and executing a binding implementation agreement.
The GRD Board is continuing negotiations with AMEC in relation to its proposal.
It is GRD's intention to make no further announcements concerning this proposal unless, and until, a binding implementation agreement has been executed.
GRD is being advised by Morgan Stanley and Hardy Bowen.
