Macmahon’s independent directors issued a statement today urging shareholders to reject the $A35 million offer when the company holds an extraordinary general meeting next week on grounds that the proposal is “not capable of being practically implemented”

The statement said the deal would require Macmahon to retain significant exposure and risk as an ongoing contracted party to construction projects being sold.

The proposed sale to Leighton Holdings was described as the only transaction practically capable of being completed.

“To not proceed with the sale to Leighton would destabilise the construction business and expose the company to significant risks,” Macmahon said.

“With the construction business in a holding pattern under these circumstances, the retention of key staff becomes even more difficult, exposing the company to potentially significant project losses.

“This risk cannot be underestimated.”

Macmahon said the Sembawang offer represented only 4c per share more than the Leighton offer and it was insufficient upside considering the execution and ongoing risks.

The risks listed in the director’s statement include Sembawang’s lack of operational and management presence in Australia, a possible lack of consent for the deal among joint venture partners and a lack of a clean exit for Macmahon shareholders from construction projects being sold.

Last week Sembawang made its third tilt within months for the construction business under the same terms as the Leighton offer but subject to due diligence, finance, board and regulatory requirements.

Macmahon has spent the past few months fighting off unsolicited offers from Sembawang, including a bid of $38 million for the whole of the construction businesses and an offer to exactly match Leighton’s terms but beating the price by $5 million.

Sembawang previously accused Macmahon of acting against the interest of its shareholders in rejecting the alternative offers – and also threatened legal action.