Australian mining equipment rental company Emeco has abandoned both its intended acquisition of Rentco and its proposed merger with Orionstone.
Managing director Ken Lewsey said the company would “focus on strengthening cash flow generation through its core business” after the end of both deals was announced on the same day.
Emeco said it had acquired Rentco in March, only to meet strong shareholder opposition after some poor financial results. The acquisition was put back to the end of April, with a completion date of three months later.
However, both parties have now called off the purchase after a review period.
Orionstone approached Emeco with a view to a merger a short time later, in what Emeco called an “unsolicited approach”.
But after the due diligence was concluded, Emeco said it could not agree on a proposal that represented value for money for its shareholders.
Chairman Alec Brennan said: “"We are disappointed not to have been able to agree reasonable terms to merge the businesses. However, we must remain disciplined in the use of our shareholders' capital.”
Ken Lewsey added: “We are continuing to see positive trends in our business. Operationally, we have had a number of important contract wins in the first half of financial year 2015 with current utilisation of 74% compared with 51% at the same time last year.”