Watpac investors vote against Belgian takeover deal

Watpac investors vote against Belgian takeover deal

Source: The Australian.
By: Robyn Ironside.

Watpac shareholders have delivered a strong rebuke to the board by voting down a 92c-a-share offer from Belgian giant Besix to acquire two-thirds of the Australian construction company.

The Watpac board and the second-biggest shareholder, Commonwealth Bank, had backed the scheme of arrangement that valued the loss-making company at $168.7 million.

But a vote by shareholders yesterday saw Besix fail to achieve the 75 per cent support needed for the deal to proceed. Of more than 100 million votes cast, 67.4 per cent were in favour of the scheme of ­arrangement.

Watpac chairman Peter Watson described the result as disappointing, but said Besix retained a 28.1 per cent shareholding in the company.

He said it would be business as usual for the group.

“Watpac remains in a strong position both financially and operationally and our fundamental strategies remain unchanged,” Mr Watson said.

Besix said the group was considering its future with Watpac following the vote result.

“We have indicated from the outset that we might review our substantial shareholding in Watpac if the proposal was not ­accepted,” chief executive Rik Vandenberghe said.

“Watpac is currently not reaching its full potential, which makes it even more regrettable that the offer has been rejected.”

Minority shareholder Sandon Capital was the most vocal opponent of the scheme and yesterday, chair Gabriel Radzyminski welcomed the vote result. He said Sandon could not recall the last time minority shareholders voted down a scheme.

“It’s very rare — that’s why bidders usually use a scheme because they think it gives them a high degree of certainty,” Mr Radzyminski said. “I think it reinforces our view that the Besix proposal was flawed to begin with.”

Mr Radzyminski said the Watpac board should consider the result “a very strong rebuke”.

“Even those 67 per cent who voted in favour of the deal, effectively voted to offload half their shares because they don’t want them anymore,” he said.

“So whether you voted for or against the transaction, it’s a strong rebuke to the board and management about how the company’s been run these past few years.”

In response to the vote, Watpac shares initially fell 7.6 per cent to 72c before rallying slightly to close down 5.7 per cent at 74c.

On Wednesday, Watpac was awarded the main building works contract for the $200m Hornsby Ku-ring-gai Hospital Stage 2 on behalf of the NSW government.

Under the contract, Watpac will deliver the Medical Imaging building and a six-storey clinical services building.

Watpac managing director Martin Monro said the company was happy with the pipeline of work before it.

“The current state of play for Watpac isn’t bad,” Mr Monro said.

“It’s just that we think with Besix on board we could’ve done more things on more fronts, more quickly.”

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