Murray & Roberts' Bid For Clough Moves Ahead

SYDNEY--South Africa's Murray & Roberts Holdings Ltd. (MUR.JO) won support of independent directors of Clough Ltd. (CLO.AU) for a buyout offer that values the engineering firm at 1.13 billion Australian dollars (US$1.01 billion).

Murray & Roberts owns 62% of Clough and last month offered to buy all the remaining shares from minority investors. Still, it had to convince the Clough board to swing behind its proposal, which is worth A$1.46 a share.

Clough Chairman Keith Spence said shareholders would likely be able to vote on the proposal, which includes a cash payment from Murray & Roberts and a special dividend paid by Clough of A$0.14 a share, at a meeting in mid-November.

A buyout of Clough appears to be an about-turn in a strategy for Johannesburg-based Murray & Roberts. Eighteen months ago the group said it was considering selling part or all of its stake in the 94-year-old company as it sought to raise funds to weather the global debt crisis.

It also comes at a low point for investment in Australia's mining sector as major companies like BHP Billiton Ltd. (BHP) and Rio Tinto PLC (RIO) look to cut costs by doing engineering work themselves rather than relying on contractors. Clough has several big contracts for work in Australia's energy sector, though, particularly in natural gas where companies are investing US$160 billion to develop facilities that can supply Asia's economies with cleaner-burning fuels.

Mr. Spence said Murray & Roberts supported the company's existing strategy.

"Murray & Roberts has indicated that it doesn't intend to make any material changes to the operations or management of Clough," he said in a statement.

Write to Rhiannon Hoyle at [e-mail]

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