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Category: Business, Economics and Finance / Company News / Takeovers / Stockmarket / Multinationals

CIMIC makes $525m takeover bid for UGL

Monday, 10 Oct 2016 09:50:57 | Thuy Ong

UGL's shares have surged nearly 50 per cent on the news. (UGL)

Construction and engineering business CIMIC has made a $524.5 million takeover bid for engineering contractor UGL, as UGL's shares have plummeted on the back of a downturn in mining.

Key points:

  • CIMIC, formerly Leighton Holdings, launches $3.15 per share offer for UGL
  • Deal values UGL at $524.5 million
  • UGL shares up nearly 50pc around midday to $3.17; shares peaked at $9.44 in 2007

The offer, at $3.15 per share, is a 47.2 per cent premium to UGL's share market close of $2.14 on October 7.

"CIMIC believes UGL's competencies are complementary to CIMIC's existing operations or enhance CIMIC's capabilities in new activities," the company, formerly known as Leighton Holdings, said in a statement.

UGL peaked at $9.44 a share in 2007, but has since suffered a beating on the back of falling commodity prices and a downturn in mining. CIMIC currently owns 13.8 per cent of the company.

In June, UGL's share price plummeted after it announced delays, disruptions and cost blowouts on the $US34 billion Ichthys LNG joint venture in Darwin.

In a statement to the ASX, UGL said its board would meet to consider the offer and provide further advice to shareholders.

"In the meantime, the board of UGL recommends that shareholders take no action in relation to the CIMIC announcement," UGL's statement said.

UGL sold its property business DTZ to a private equity-led group of investors including TPG Capital and PAG Asia Capital in 2014.

UGL shares surged 48.6 per cent to $3.17 in midday trade on the offer, its highest price since early June and its biggest one-day jump since listing.

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