Belgium’s BESIX Bids for 64 per cent Stake in Watpac

Watpac’s largest shareholder, the Belgian construction group Besix, has increased its stake in the company, lifting its ownership to two-thirds.

The news comes as the ASX-listed development and construction company reported an interim loss of $1.4 million.

Watpac said an agreement was being put together that would see Besix take on an additional 36 per cent share capital, offering all-cash consideration of $0.92 per share.

The construction giant will stand to control 64.1 per cent of the company valued at $168.7 million.

The structure of the proposal, if approved and implemented, means that Watpac shareholders will retain half of their current holding, and accordingly, will continue to participate in Watpac’s future growth.

“If approved, this transaction will reinforce the company’s strategic direction and position Watpac for long-term success,” Watpac chair Peter Watson said.

In the wake of the deal, Watpac simultaneously announced a statutory loss after tax of $1.4 million for the second half of 2017, as a result of lower work volumes in the civil and mining sectors.

“Our construction business has continued to perform profitably over the past six months however this has been impacted by a reduction in the financial contribution of the group’s civil & mining business,” Watpac managing director Martin Monro said.

Besix chief executive Rick Vandenberghe said that its proposed 64 per cent stake in Watpac would help the company diversify into new construction markets.

“Our business is becoming less exposed to the intense price competitiveness of some components of the construction market and we believe we are delivering on the objective of significantly enhancing the quality of the workbook,” Vandenberghe said in the Australian Financial Review.

"We have the technical capabilities and great in-house departments to help Watpac diversify. Financially, we can also help Watpac win bigger projects.”

It is expected that Watpac would become the channel for Besix’s Australian projects.