German investor buys 25% of Murray & Roberts, may launch takeover

Germany’s ATM Holding yesterday acquired 25.5% of South African construction group Murray & Roberts (M&R) – a move that makes it the largest shareholder – leading to expectations of a imminent full takeover bid.

Once one of South Africa’s biggest contractors, M&R yesterday announced a drop in turnover and a $4.7m loss in the six months to December 2016.

ATM is a wholly-owned subsidiary of Aton, a German investment company controlled by the Helmig family. It has holdings across the mining, engineering, aviation and health technology sectors.

Aton bought a 4.49% shareholding in M&R between June and September 2015 and has since acquired the stock of a number of large shareholders, including South African business magnate Allan Gray and Sanlam Investment Management. Coronation Fund Managers sold of its 15% interest last week.

Henry Laas, the chief executive of M&R, said he viewed ATM’s move as "an opportunity, not a threat".

"I’m pretty relaxed about what is happening," he said. "Other than the formal notification received, we have not received any further communication regarding their investment in M&R. I have written a letter welcoming them and asked for further engagement so we can talk about their investment."

The move comes on the same day that the Johannesburg company announced its financial results for the six months to December. These shows a decline in revenue from R10.7bn ($835m), compared with R13bn ($1bn) for the six months to December 2015; it made a loss of R60m ($4.7m) compared with a profit of R376m ($30m) in the previous year.

M&R blamed the fall on lower earnings in the oil and gas sector, foreign exchange movements, and inflation in the Middle East.

It announced last year that it would exit the infrastructure and building market and would "focus its business on the global natural resources markets".

It has sold its South African construction and civil engineering to a consortium led by the Southern Palace Group for R314m ($25m).

The company has a market value of about $510m.

The Helmig family traces its wealth to the sale of Helios Clinic, the European healthcare business that it founded, for $2bn in 2005. It is based in Munich.

Image: Murray & Roberts’ Johannesburg headquarters (Bruce Paulmac)

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