WELLINGTON Feb 28 Dubai-based engineering firm
Dar Group said on Tuesday it had taken a 13.4 percent stake in
WorleyParsons Ltd months after a failed takeover
approach, sending shares in the Australian engineering company
up 30 percent.
The strategic stake makes Dar the largest shareholder in
Worley and comes a week after weak trading conditions for mining
contractors pushed the potential takeover target to a first-half
"This looks like a pre-emptive bid to make sure that no-one
else takes it over," Mathan Somasundarum, a strategist at broker
Blue Ocean Equities.
"You just wait for the cycle, and when it gets cheap, you
WorleyParsons rejected a A$2.9 billion ($2.2 billion) full
takeover bid from Dar Group in November, the company said in a
statement on Tuesday.
Dar Group said in a separate statement that there have been
no further discussions between the parties since then and that
Dar Group had no "present intention of initiating discussions"
about a change of control.
WorleyParsons shares jumped to A$10.62 at the open of trade,
their highest in 19 months, while the broader Australian market
rose 0.3 percent. That is still below Dar's November
offer price of A$11.80 per share.
"The board concluded the proposal materially undervalued the
company," WorleyParsons said of the November offer, adding it
was "highly conditional".
Reporting its results last week, Worley, which serves
Australia's oil and mining sectors, said it was hit by declining
sales as a downturn in commodity prices prompted resources firms
to curb spending.
($1 = 1.3031 Australian dollars)
(Reporting by Tom Westbrook; Editing by Stephen Coates)