Emeco Rebuffs Sale Speculation
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Shares in mining equipment supplier Emeco Holdings were dumped yesterday afternoon after it rejected suggestions it might be sitting on an unknown bid.
The shares fell 5% to 28 cents (on a day when the wider market ended higher) after it said it had not sought or received any offers to sell, following a report it presented the possibility to its biggest shareholder.
The Australian Financial Review reported an Emeco presentation to 23% shareholder Black Diamond Capital Management canvassed the prospect of a trade sale to the likes of Kerry Stokes’ Seven Group Holdings which controls the big caterpillar franchise owner, WesTrac.
The AFR story also talked about a US rental business or private equity player as potential buyers (Carlyle Group controlled Coates Hire with Seven Group Holdings for a number of years until it sold late last year).
Emeco said in a statement to the ASX that the extracts came from an early draft of a confidential board document.
“Emeco’s management team constantly considers the company’s strategic position in order to maximise long-term value for our stakeholders and regularly presents various strategic options to the board,” a company statement said.
“Although Emeco’s policy is not to comment on speculation, Emeco notes it has not solicited, nor received, any proposals regarding a sale of the company. “Shareholders should not take any action in response to the press speculation.”
Emeco said its fiscal 2018 earnings were expected to be in line with brokerage analysts’ forecasts.
The company didn’t explain when the document and why.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.