Austin Engineering Limited
(ASX:ANG) has offered a subdued response to an unsolicited takeover bid from Bradken Limited
(ASX:BKN), which already owns 21.5 per cent of the group.
Austin says that a tie-up has some merit, but not under the current terms proposed by Bradken.
It says the board determined there may be benefit in combining the companies but found the proposal undervalues Austin.
The current deal would see Austin shareholders receive 0.75 Bradken shares for every one Austin share they hold, which would value the engineering group at just over $300 million.
The company warned investors that there was no guarantee appropriate terms would be agreed with Austin to pursue a capital raising in the meantime.
Austin Engineering generated a net profit of $28.4 million in fiscal 2013.
