2 Min Read
WELLINGTON, Feb 28 (Reuters) - 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 loss.
"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 bully."
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