February 17, 2017 / 5:46 PM / in 9 months

South African group M&R's shares jump as major shareholder exits

JOHANNESBURG (Reuters) - Murray and Roberts (M&R) said on Friday that Coronation Fund Managers had sold all of its stake in the South African engineering and construction group.

M&R said on Friday Coronation had sold the shares. On Thursday, the shares had jumped about 29 percent to a near six-month high. Coronation held about 15 percent of M&R’s shares, according to Thomson Reuters data.

M&R said in a statement that it was not aware what led to the rise in its stock. It said around 96 million shares had traded during Thursday’s session, equivalent to approximately 22 percent of the company’s share capital.

The shares closed 2.7 percent higher on Friday.

M&R said the new shareholders would have until Tuesday to disclose their share purchase.

M&R head of investment Ed Jardim said that it was too early to tell why they had bought the stock.

“It could be a strategic shareholder where a shareholder likes the value proposition of Murray and Roberts and wants to ask for a board seat, it could be a takeover, it could be a major shareholder wanting to exit,” said Jardim.

Officials at Coronation were not available to comment

“They (M&R) have recently been focussing on the U.S., predominantly and with [President Donald] Trump trying to roll out a heavy infrastructure plan somebody might have his eye on Murray and Roberts,” research analyst and portfolio manager at Gryphon Casparus Treurnicht said.

M&R sold its South African infrastructure and building business in November as part of plans to become an international engineering group. South Africa’s construction industry has slowed as government contracts, which big companies depend on, stall and weak commodity prices hit demand from the mining industry.

Reporting by Tanisha Heiberg; Editing by James Macharia and Jane Merriman

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