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The wholly owned Australian subsidiary of Singapore-based Sembawang Engineers and Constructors submitted a two-part offer for the Macmahon board to consider.
Under Part A, Sembawang offers $A38 million to purchase all of Macmahon’s construction businesses, including the rail business. Part B is a counter-proposal to the existing Leighton Holdings offer, on the same terms and conditions but for an additional $5 million to come in at $25 million.
Both offers are subject to satisfactory due diligence and approval by the Sembawang board of directors by close of business on January 31.
Macmahon said it would review the offer.
“The board is considering the proposal and will continue to keep the market informed in accordance with all legal and regulatory requirements,” the company said.
Macmahon confirmed the sale of the majority of its construction projects to Leighton on December 24, subject to shareholder approval in February.
The Leighton deal allows Macmahon to hold on to a few projects nearing completion, including Hope Downs 4, Solomon Rail Spur, Gladstone LNG project and several minor projects.
Macmahon employees working on the projects sold are expected to transfer to Leighton, as are Macmahon’s non-project employees in the Northern Territory.
Leighton owns 24% of Macmahon.
When Sembawang offered its first proposal on January 3, Macmahon said the exclusivity of the asset purchase agreement already in place meant Sembawang could not perform due diligence without prior consent from Leighton.
Sembawang initiated legal action against Macmahon on Monday for blocking the company from performing due diligence. Sembawang also alleged Macmahon failed to disclose details of a November 26 offer to purchase the construction business prior to the Leighton announcement.
Sembawang released a series of emails yesterday between its president and CEO Richard Grosvenor and Macmahon CEO Ross Carroll. They dated from November, where Grosvenor expressed initial interest in purchasing the construction arm of Macmahon. Carroll did not respond to the offer.
Macmahon shares gained 3.6% or 1c to 28.5c in morning trading today.
This article first appeared in ILN's sister publication MiningNews.net.
