April 17, 2018 / 3:45 PM / in 5 days

Murray & Roberts' second biggest shareholder increases stake amid takeover battle

JOHANNESBURG, April 17 (Reuters) - Africa’s biggest pension fund Public Investment Corporation (PIC) has increased its stake in Murray & Roberts to 20 percent after opposing a takeover offer for the South African engineering group.

Murray & Roberts (M&R) said on Tuesday that PIC had increased its stake to 20.16 percent, from 15.34 percent, a day after PIC rejected a buyout offer for M&R from Germany’s ATON, saying it “materially undervalues” the South African group.

PIC is Murray & Roberts’ (M&R) second biggest shareholder but its move may not thwart ATON’s ambitions of getting a 50 percent plus one share majority as other shareholders could sell their shares.

ATON, which already owns more than a third of M&R, did not immediately respond to a request for comment.

It made its buyout offer last month, at 15 rand ($1.3) per share, valuing M&R at nearly $600 million.

M&R said last week that an independent report had showed that a fair offer for the company would be as much as 22 rand ($1.85) per share.

The German investment vehicle has increased its stake to 39.8 percent from 33 percent since its bid was announced, after obtaining shares from two top 10 shareholders, including Investment management company Allan Gray, M&R’s third largest shareholder.

ATON requires just over 10 percent to achieve it’s minimum requirement for a potentially successful bid.

Some of the top 10 shareholders in M&R include Sanlam and Dimensional Fund Advisors with 4.93 percent and 4.72 percent stakes respectively, according to M&R’s shareholder analysis. They have declined to comment.

Old Mutual was the first to publicly reject the offer saying that it is “below what we believe is fair value.”

M&R’s shares closed up 1.4 percent on Tuesday at 15.28 rand. ($1 = 12.0383 rand) (Reporting by Patricia Aruo; Editing by Susan Fenton)

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