Successful Defence of A$700m Hostile Takeover by Leighton Holdings
In July 2007, Leighton undertook a successful market raid to acquire an initial stake of 8% in Macmahon, an ASX listed contracting group operating in the civil construction and mining sectors. Azure had acted as corporate adviser to Macmahon in relation to a number of transactions over the previous three years and was subsequently appointed Joint Defence Adviser with UBS, after Leighton indicated it was seeking to build a significant stake in Macmahon.
Leighton’s interest in Macmahon was seen as being both a pre-emptive action against a potential competitor as well as recognition of Macmahon’s success. The defence focused on preventing Leighton from gaining de-facto control without payment of a premium, primarily through ensuring share price strength, whilst developing other defence strategies including identifying and activating potential white knights.
Macmahon ultimately negotiated a standstill agreement with Leighton at a 15.6% shareholding, which included a MOU for a partnering relationship in exchange for one board seat.