MACA accepts Thiess’s revised all-cash $1.075-a-share offer

MACA Ltd’s (ASX: MLD) share price was up around 2% after lunch following revelations that would-be acquirer, privately-owned Thiess, has upped the ante on its previously rejected offer, in a manoeuvre that appears to have successfully broadsided rival bids for the mid-cap mining contractor.

This morning MACA’s board accepted a revised all-cash $1.075-a-share offer from Thiess - which now values the company at $367.3m - over last week’s proposed cash and scrip deal by fellow contractor NRW Holdings (ASX: NWH) worth $1.085 a share cash.

The deal is still subject to approvals by the FIRB and ACCC.

Superior mining business

As well as having misgivings about NRW’s cash and scrip offer, MACA’s board also argued that its mining business is superior to its listed rival’s operation.

The revised offer represents a premium of 49.2% to MACA’s one-month volume-weighted average price as at July 25, and premium of 8.5% to MACA ’s last close 17 August 2022.

Unsurprisingly, NRW’s share price was down by a corresponding amount to MACA’s gains today.

FY22 result

What may have galvanised Thiess’s - half-owned by construction group CIMIC Group (ASX: CIM) - desire to acquire MACA was the contractor’s robust full year FY22 result.

Last week MACA reported a more-than-doubling of annual net profit of $42.8m, up from $14.4m previously, on a 41% rise in revenue to $1.65bn.

MACA, which provides services to iron ore mines, is currently in the eye of an uptick in demand from the resources and civil sectors, as Australia emerges from the pandemic.

However, while the contractor claims to have $2.8bn of work at hand, it remains to be seen whether labour shortages and supply chain disruptions will have any material impact on future project execution.

New projects

Adding to MACA’s order book is a mining project plus several new civil and infrastructure contracts with a total value of about $90m.

It’s understood the contractor has entered a maintenance and operational fleet arrangement with Allkem Limited (ASX: AKE) at its Mt Cattlin lithium project in Ravensthorpe, Western Australia.

The project is expected to generate around $12m in revenue over the next six months and could lead to further work.

Consensus on MACA is Hold.

Based on Morningstar’s fair value of $1.39 the stock appears to be undervalued.

MACA Ltd's share price over 12 months.