Hitachi Construction offers A$689m for Australia’s Bradken
TOKYO – Hitachi Construction Machinery, the world’s biggest maker of giant excavators, made a A$689-million offer to acquire Bradken, an Australian supplier of mining equipment.
The company will offer A$3.25 per share to buy the Newcastle, New South Wales-based company, the Japanese manufacturer said in a statement on Monday. That’s a 34% premium over Bradken’s closing share price on Friday, according to Bloomberg calculations. The offer was recommended by Bradken’s board, according to a separate statement.
The acquisition would enable Hitachi Construction Machinery to supplement its parts business for mining equipment and boost earnings, the Tokyo-based company said. The announcement comes about two months after its larger domestic rival, Komatsu said it agreed to buy US-based Joy Global for $2.89-billion, signalling the company is optimistic that demand for shovels and drills will rebound after years of declining commodity prices.
Hitachi Construction Machinery plans to start a tender offer for Bradken for six weeks from mid to late-October, according to its statement. The Australian company last year rejected a A$428-million offer from Koch Industries and Pacific Equity Partners, saying it didn’t reflect the fair value.
The Japanese company will use funds on hand as well as bank borrowing to finance the acquisition, it said. The company is Japan’s second-biggest maker of construction and mining equipment, while it has the biggest global share of giant excavators used in mining.
The plan was announced after the Japanese stock market closed on Monday. Hitachi Construction Machinery, half owned by Hitachi, closed 0.6% higher at 2 011 yen in Tokyo, extending its gain this year to 6%.
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