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Canadian construction firm Aecon is said to hire advisers to explore sale
[HONG KONG] Canadian construction company Aecon Group Inc. hired advisers to consider a sale, according to people familiar with the matter.
Aecon, which helped build Toronto's CN Tower, is working with Toronto-Dominion Bank and Bank of Montreal on the sales process, said the people, who asked not to be identified because the matter is private. The company could attract interest from Chinese bidders, the people said. Deliberations are at an early stage and there's no guarantee the company will sell itself, they said.
Shares of the company rose as much as 8.3 per cent to C$15.53 in Toronto before trading was halted.
Representatives for Aecon and TD declined to comment. BMO declined to immediately comment. Shares of Aecon have fallen 23 per cent in the past year through Thursday, giving it a market value of about C$842 million ($674 million). The company could be worth about C$24.96 a share in a takeover based on recent transactions in the sector, Maxim Sytchev, a Toronto-based analyst with National Bank Financial, wrote in a note to clients dated June 4. That would be a 74 per cent premium to where the company's shares closed Thursday.
Activist investor Eric Rosenfeld of New York-based Crescendo Partners was nominated to Aecon's board in June. Rosenfeld held 214,000 shares as of July 7, according to data compiled by Bloomberg.
Aecon has been without a permanent chief executive officer since November, when executive chairman and founder John Beck replaced Terrance McKibbon on an interim basis. The company said in July it's still searching for a CEO.
Despite the share slump, Aecon is well positioned to benefit from the new C$35 billion (S$38 billion) Canada Infrastructure Bank, Mr Beck said on a conference call last month. The bank was launched by the federal government to help develop Canadian infrastructure projects.
"Aecon is currently pursuing projects at the bidding or qualification stage and have total capital costs in excess of C$25 billion," Mr Beck said at the time. "We are very positive on the impact this level of investment and pipeline of projects will have on Aecon's growth and margin profile." Aecon operates companies across the mining, infrastructure, energy and services industries, building projects from factories, roads and sewers to theaters, book stores and hotels, according to its website.