NRW Holdings is pushing the proverbial uphill at MACA Ltd.
Late to the party and carrying years of baggage, NRW needs to meaningfully increase or restructure cash and scrip bid if it is to drive a wedge between MACA and suitor Thiess, owned by CIMIC and Elliot Investment Management.
From here, the higher NRW goes, the harder it is to make the investment case stack up. The more it offers, the greater the funding hurdle and lower the expected return on the MIt looks to Street Talk like a textbook case of scrip vs cash bids where it’s hard to beat a first in the door and motivated cash bidder. Examples include AusNet and Crown Resorts last year.A situation is bound to come up. While MACA has to address it, what it may not be able to say is that Thiess leads NRW in three areas.
The third is the old cash vs scrip chestnut. Cash is usually king, and maybe more so when the scrip bidder’s business is chocked with coal contracts.The good news for NRW is that MACA’s register has attracted some hot money and those investors are no longer thinking about Thiess’ $1.025. Some sell-analysts are also excited about the prospect of a higher deal.
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