A $1.5 billion cash takeover for CIMIC offers a lower premium for control than other recent acquisitions in the mining and engineering sector but has been described as “fair and reasonable” by an independent expert.
related to work done by subsidiary UGL as part of a consortium on a power plant for the Ichthys LNG Project in the Northern Territory will start arbitration on April 14 and run for about six weeks, with a decision expected in 2023.
The UGL consortium is claiming $741.7 million plus interest and arbitration costs, but the JKC consortium is claiming $2.08 billion plus interest and costs. Mediation in December failed to reach a commercial settlement. A potential “negative result” was a significant risk for Cimic shareholders and could influence the price paid for the business by potential purchasers, Grant Thornton said, noting that the construction group had historically “incurred losses and impairments significantly larger than its provisions”.
If it only secures 90 per cent of the shares by number, it can still apply to compulsorily buy the remaining shares but must provide a report from an independent expert nominated by the Australian Securities and Investments Commission and an objection form. Grant Thornton has valued Cimic’s construction division at $4.2 billion to $5.17 billion and its services division at $1.65 billion to $1.92 billion. It puts the total enterprise value of the company at $7 billion to $8.6 billion, including $498 million in debt.writes on business, specialising in infrastructure and transport.
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