Dubai-based engineering consultancy Dar Group has become a substantial shareholder in WorleyParsons despite an earlier bid to take over its Australian rival being knocked back.
WorleyParsons revealed to the Australian Stock Exchange that Dar Group had offered to buy its business last November, but that its board turned down the approach because they believed it “materially undervalued the company”. The offer of A$11.80 per share valued the company at over $A2.92 billion (Dh8.25bn).
In a statement, WorleyParsons said that Dar Group’s bid “was also highly conditional in relation to financing, due diligence, process, regulatory and other conditions which created significant execution risk and uncertainty” of a takeover being successfully executed.
“The board therefore determined that the proposal was not in the best interests of shareholders and advised Dar Group accordingly.”
Following its announcement, WorleyParsons shares jumped by almost one-third in trading yesterday, climbing 32 per cent to A$10.65 per share.
Dar Group said its bid had been conditional on a number of factors, including the support of WorleyParsons’ management.
It said there have been no further discussions with WorleyParsons’ board since its offer was turned down, and that it has “no present intention of initiating discussions” with the company about another takeover.
Dar Group has built a 13.35 per cent stake in WorleyParsons – 8.61 per cent of which is in shares and 4.74 per cent through a cash equity swap agreement.
It intends to retain the stake “with a long-term strategic perspective and looks forward to being a supportive shareholder”, it said.
“Dar Group views WorleyParsons as the pre-eminent energy and design consultancy globally and respects the role the chairman, board and management team have played in establishing this market-leading position.”
WorleyParsons is an infrastructure and energy specialist with 24,500 employees in 42 countries.
The firm’s shares took a hit last month after it announced a A$2.4 million net loss for the six months to December 31, on the back of a 30.3 per cent decline in revenue to A$2.17bn. The company said the dramatic fall in sales was “in line with overall market contraction”.
Dar Group is a privately owned business headquartered in Dubai that has grown substantially through acquisitions.
The firm began with Dar Al Handasah – a consulting engineering business started by four engineering professors from the American University of Beirut in 1956. Now its 35 shareholders are in charge of 13 companies employing 18,000 staff across 200 offices.
Businesses acquired over the years have included the Chicago-based architecture firm Perkins + Will, the Austrian tunnelling specialist D2 Consult and UK-based project management company Currie & Brown, which itself recently acquired Sweett Group in a £29m (Dh132.3m) deal last June.
Dar Group is run by the chairman and chief executive Talal Shair. The engineering consultancy business has been through a wave of mergers in recent years as firms attempt to build global scale.
mfahy@thenational.ae
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