The race is now on between SA's second- and fourth-largest construction groups, Murray & Roberts and Wilson Bayly Holmes-Ovcon (WBHO) respectively, to conquer smaller rival Concor.
Murray & Roberts said late on Tuesday it had notified Concor's board of its firm offer to buy the group for R297m, or R22,30 a share, an 11% premium on Concor's share price on Tuesday.
This followed hard on the heels of WBHO's announcement a few days earlier that it was in preliminary talks with Concor over the possibility of a merger.
Both moves surprised analysts who did not consider Concor - about the fifth-largest construction group on the JSE Securities Exchange SA - to be a particularly good buy.
But some analysts have speculated that Murray & Roberts and WBHO may want to strengthen capacity ahead of anticipated growth in the R50bn-a-year sector, driven mainly by government's R165bn infrastructure plans.
A merger between Murray & Roberts' construction division and that of its takeover target is likely to topple Aveng's Grinaker-LTA as the largest construction entity in the country.
Murray & Roberts said it had regularly considered the acquisition of Concor which, it said, had potential within the group's domestic strategy.
Analysts speculated WBHO may be interested in extending its activities into the manufacturing and mining sectors through the acquisition of Concor, which has a steel business, among other manufacturing activities, and a contract mining division.
There have also been rumours for several years that German company Hochtief has wanted to dispose of its 49,99% stake in Concor.
News of Murray & Roberts' offer came as a surprise to WBHO, said financial director Angus MacKenzie. He could not say how WBHO would respond.
A merger between WBHO and Concor would put WBHO on a par with the construction divisions of sector heavyweights Murray & Roberts and Aveng.
