Emeco confirms takeover interest from several parties

Mining equipment rental group Emeco is being stalked by potential buyers trying to lure out its major shareholder.

The $600 million Perth-based group confirmed on Monday it had been looked over by several parties, though none had yet put forward any proposal capable of being considered by Emeco’s board.

Its shares jumped as much as 9 per cent to a four-year high of $1.20 before retreating to be 8¢ higher at $1.16.

“Emeco confirms that it has received unsolicited interest from a number of potential acquirers and has had discussions with those parties,” the company told investors.

“However, at this time, no party has put forward a proposal which warrants being progressed to a binding proposal.

“Emeco will keep shareholders informed of any material developments as appropriate.”

The company is particularly exposed to a bid given its major shareholder is a private equity group with a near 41 per cent holding.

US-based Black Diamond Capital Management emerged as the major force on Emeco’s share register after a debt-for-equity swap in 2017 as part of a restructuring that combined the WA group with fellow contractors Andy’s Earthmoving and Orionstone.

Last financial year, Emeco recorded a 44 per cent increase in annual net profit to $75.1m on a 7 per cent rise in revenue to $785.4m, boosted by strong demand for its dump trucks, loaders and excavators from iron ore, coal and gold miners.