From today's Courier Mail:
A PRIVATE equity takeover of resource-engineers Ausenco faces a big hurdle: wooing two substantial shareholders who paid far more than the price at which the Brisbane outfit’s shares currently wallow.
Ausenco employs 1800 staff who have worked on projects such as Queensland coal mines, and it received a tentative offer to privatise the firm this week.
The offer came from private equity outfit Resource Capital Funds, which has a 5.5 per cent stake in Ausenco.
RCF’s offer will need the backing of fund manager First Samuel, which owns 17.6 per cent of Ausenco, and Spanish construction outfit Duro Felguera, which owns 14.5 per cent.
That’s because RCF’s offer is via a scheme of arrangement — a majority of eligible shareholders must be in favour of the deal, and three-quarters of voted shares must also back the scheme.
RCF has already taken over Ausenco’s debt but is keeping its cards close, only saying any privatisation offer would be at an “attractive premium to recent prices”.
Those shares are now trading near 31c, below all-time highs of $15.02 in 2008 during the mining boom. Shares have fallen in the downturn; Ausenco’s loss hit $86 million last year and it missed revenue forecasts.
SPANISH PAY 60C SHARE 12 MONTHS AGO
That 31c price is also below the 60c a share Duro paid last July when it nabbed a $10.7 million “cornerstone” take in Ausenco. Attempts to obtain comment from Duro, which lost 68.9 million euro ($A106 million) last year, were unsuccessful.
Stockmarket notices indicate First Samuel has bought Ausenco shares at between roughly $2.12 and 22c in recent years, although the fund’s Dennison Hambling estimated their average price would be close to Duro’s 60c a share take-up.
“We expect to see a reasonable cash price (offer) that just reflects the cycle will start to turn in Ausenco’s favour” in the next few years, Mr Hambling told The Courier-Mail. “There’s good value and prospects in Ausenco,” he said.
Surprisingly, Ausenco chairman George Lloyd said he did not see RCF’s approach as opportunistic.
“Many of the companies in the resources sector and engineering services sector have been having a tough time of late … (RCF) have a long-term view of the business,” Mr Lloyd told The Courier-Mail.
Management, including chief executive officer Zimi Meka, who owns 9.8 per cent of Ausenco, are not on an independent board committee used to assess any bid. This is to prevent any perceptions of conflict of interest given management might stay at Ausenco post any takeover.
“This is a people business … and for the business to go ahead it requires the people to be involved,” Mr Lloyd said. There was no agreement or understanding between management and RCF, he added.
Ausenco holds their annual general meeting in Brisbane on Thursday.
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