Johannesburg - Wilson Bayly Holmes-Ovcon (WBHO), the medium-sized listed construction company, was negotiating to buy a construction group, Angus Mackenzie, WBHO's financial director, said yesterday after the company released a cautionary announcement.
Although Mackenzie declined to comment further, it would appear that the target is an unlisted entity because no other listed construction entity issued a cautionary announcement. The takeover target could, however, be a previously listed entity.
The deal is subject to certain conditions and no monetary amount was disclosed.
WBHO management earlier this year said the company was investigating purchasing a construction company in Australia, but management said yesterday that discussions in this regard had not progressed further.
The domestic acquisition is not likely to change the company's medium-sized stature. As for the negative outlook for infrastructural spend and slow prospect of economic growth, Mackenzie said "the environment is what you make it".
Mark Ingham, an analyst at SG Securities, said WBHO was a solid medium-weight company, looking outside South Africa on a regional basis where it had a competitive advantage.
The company does not have foreign operations beyond Africa, though it continues to set up associations with other companies in joint ventures, which over the medium term includes the Middle East.
The share price of the company closed down 10c yesterday at R4,10.