The CEO of Watpac's major shareholder BESIX, Rik Vandenberghe, has suggested the company will pull support from Watpac entirely if BESIX is not granted total control of the company.
Ahead of a scheme meeting to decide the future of Watpac, where shareholders will vote on whether to grant 50 per cent of Watpac shares to BESIX, Vandenberghe has threatened walk away from Watpac if the vote does not return as a 'Yes'.
Speaking to Business News Australia from Belgium, Vandenberghe says whilst the company has not yet made a decision about how to proceed if it doesn't get its way it is very seriously considering withdrawing support for Watpac.
"We have a clear plan and we know we can do it, we know we can make Watpac successful," says Vandenberghe.
"But it needs a lot of work and the only alternative is BESIX. If it's not BESIX then I think it will be very difficult for Watpac in the next six years.
"Right now, with 28 per cent, we are not in a position where we can change things. If we don't get in the position where we can change things we will seriously reconsider our position."
Vandenberghe's threat follows Friday's announcement of BESIX's final and best offer to acquire 50 per cent of Watpac shares held by Watpac shareholders.
The Belgium-based company offered the final price of $0.92 per share which it says is its final and best offer for Watpac shares.
In the three months since BESIX first proposed the takeover of Watpac, no superior proposal has been announced.
Watpac reaffirmed its stance to unanimously recommend that its shareholders vote in favour of the takeover offer at its next Scheme Meeting to be held on 7 June 2018.
According to BESIX, an independent expert has also concluded that the scheme proposal is fair and reasonable and in the best interests of Watpac shareholders, in the absence of a superior proposal.
Vandenberghe highlighted to shareholders considering voting 'No' that they have no other real option, and that Watpac was unlikely to survive without BESIX intervening.
"There is a train passing, the train is BESIX, it's a fantastic train. I hope people jump on it," says Vandenberghe.
"I know that some people are making a lot of noise against the proposition of BESIX but these are not the people who will run the company, it's easy to make comments.
"We know that it's a big job that needs to be done, we need to realise the turnaround of this company and we need to bring a future to this company. We can do that, we want to do that, but only if we are in a position where we are able to do it."
BESIX announced its intention to takeover the Australian construction and mining company immediately after Watpac announced its statutory loss of $1.4 million at 1H18.
The Belgium-based company is Watpac's largest shareholder, holding 28.1 per cent voting power as of February.
If the scheme proposal is accepted, BESIX's share of Watpac will increase to 64.1 per cent of the company's total share capital.
The takeover proposal of $0.92 per share values Watpac at $168.7 million on an equity value basis.
On its half year financial performance, Watpac managing director Martin Monro says the group's selective tendering practices in targeted sectors resulted in an improved workbook quality anticipated to result in enhanced earning prospects.
"Our construction business has continued to perform profitably over the past six months however this has been impacted by a reduction in the financial contribution of the group's Civil & Mining business," says Monro.
The group attributes the loss to lower work volumes in the mining business, offsetting a solid financial performance from the group's construction business, which recorded a 2.56 per cent increase in revenue for the reporting period.
Monro says the reduction in the financial contribution of its civil and mining business was disappointing and also reflective of the lower levels of work completed during the first half, as several large projects neared or reached completion.
"While there is low work-in-hand for the mining component of our business, pleasingly our civil infrastructure opportunities continue to grow and we anticipate this to continue into future periods," says Monro.
Shares in Watpac are down 0.63 per cent to $0.79 per share at 10.09am AEST.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support