Murray & Roberts Falls on Acquisition Price: Johannesburg Mover

Murray & Roberts Holdings Ltd., South Africa’s second-biggest builder by market value, fell the most in more than two years as investors fretted the company will overpay for an Australian acquisition.

The stock fell 5.6 percent, the biggest decline since February 2011, to 23.78 rand at close in Johannesburg, the lowest level since June 14. About 8.6 million shares traded, 4.6 times the three-month daily average.

Murray & Roberts offered to buy the 38.4 percent in Australia’s Clough Ltd it doesn’t already own for about 4 billion rand ($403.9 million) in cash, the Johannesburg-based company said in a statement after the market closed yesterday. It will pay about A$1.46 a share, a 31 percent premium over Clough’s July 30 close of $1.115, according to the statement.

“The initial market reaction would appear to be concern that Murray & Roberts would pay an excessive premium for the remaining interest in Clough,” Brent Madel, an analyst at Cape Town-based BPI Capital Africa Pty Ltd., said in a phone interview today. “It may take a few days for investors to correctly ascertain whether this level of premium is warranted given the strong growth prospects Clough has in the Australian LNG market.”

Murray & Roberts is targeting the oil, gas, power and mining industries to propel medium- to long-term growth, Chief Executive Officer Henry Laas said in a separate e-mailed statement yesterday.

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