Dubai-based Dar Group has acquired a 13.35% stake in engineering firm WorleyParsons, after it tried to buy 100% of the Australian business late last year.
WorleyParsons on Monday confirmed it knocked back an $11.80 per share offer for 100% of the business from Dar Group in November 2016.
While the 100% takeover was rejected, Dar Group confirmed it had acquired a total exposure of 13.35% of WorleyParsons via the purchase of 8.61% of physical shares, and a cash settled equity swap exposure of 4.74%.
“WorleyParsons [is] the preeminent energy and design consultancy globally,” Dar Group said in a release.
“Dar Group has acquired the stake with a long term strategic perspective and looks forward to being a supportive shareholder.”
The Dubai-based business, which has 18,000 staff in 58 countries, said it currently has no intention of acquiring any more of WorleyParsons, despite the 100% bid in November.
The revelation that a $11.80 per share takeover offer was made has upset some WorleyParsons shareholders, who believe the company should have disclosed the offer at the time.
Simon Mawhinney, managing director of Allan Gray, which owns roughly 5% of WorleyParsons, told the AFR he prefers boards to have a “transparent” approach to takeover offers.
“Best practice would have been to disclose the [takeover] approach,” Mawhinney was quoted as saying this week.
“It wasn’t a crazy price.
“I’m a bit surprised to read that they knocked back an $11.80 per share bid without perhaps telling shareholders about it.”
WorleyParsons’ share price skyrocketed to a $10.65 close on Tuesday, after closing on Monday at $8.07, a single day growth of $2.58, or 32%.
WorleyParsons said on Tuesday its board chose to reject the $11.80 per share bid in November because it “materially undervalued the company”.
“The proposal was also highly conditional in relation to financing, due diligence, process, regulatory and other conditions which created significant execution risk and uncertainty for the company.
“The Board therefore determined that the proposal was not in the best interests of shareholders and advised Dar Group accordingly.”
WorleyParsons’ rail capabilities include transport consulting, master planning, design and project delivery, rolling stock and procurement.