Macmahon Holdings Ltd. effectively rejected a A$174 million takeover offer from mining contractor CIMIC Group Ltd., advising shareholders to take no action on an unconditional cash bid worth 14.5 cents per share, The Australian reported Jan. 27.
CIMIC currently has a 20.54% stake in Macmahon.
"The preliminary view of independent directors is that CIMIC's offer does not represent fair value," Macmahon commented, adding that the bid's 32% premium to its stock price falls short of its net tangible asset value and does not reflect opportunities in a rebounding resources sector.
Macmahon noted that it has little debt with near-term expansion opportunities through AngloGold Ashanti Ltd.'s Tropicana gold mine and Newcrest Mining Ltd.'s Telfer gold mine, both in Western Australia.
The contractor expects its revenue from Tropicana to jump by 25% this year as it recently secured volume increases at the mine. In addition, Macmahon expects to announce a contract in Indonesia in coming weeks.