Perenti, has confirmed that it is mulling the purchase of Downer Mining Services. However, the company denied recent media reports that pegged the transaction at around A$700 million ($471 million).

 

The company noted the reported transaction value was much higher than what it’s willing to offer Downer.

 

In a statement to the Australian Stock Exchange, Perenti indicated it was still contemplating the acquisition, but would only proceed if it aligned with the company’s “overall strategy” and provided “value to its shareholders.”

 

The acquisition would improve business for Downer, which has suffered from a slack Australian economy and rising operational costs. In its latest trading updated released last month, the mining services firm revised its 2020 net profit down to A$300mn. The company cited project underperformance, lower revenue, and unbudgeted restructuring costs in its engineering, construction and procurement business segment, as some of the reasons for the guidance revision.

 

Perenti, on the other hand, posted strong FY 2019 results and forecasted strong growth in 2020 after it acquired underground mining contractor Barminco in the previous fiscal year. The company indicated its order book had grown to A$7bn after securing A$3.4bn in new and extended contracts since the end of FY 2018.

 

Perenti is a diversified global mining company, while Downer provides integrated mining services in Australia and New Zealand.

Leave a Reply

Your email address will not be published.