Construction companyAecon Group Inc. has sold the 3.5 million shares of competitor Churchill Corp. that it owned for proceeds of $61-million. The majority of this position was first purchased back in June, 2010, when Churchill sold subscription receipts to fund its acquisition of Seacliff Construction Corp.
At the time of the purchase, John Beck, Aecon's chairman and chief executive officer, said "I believe this will give us the opportunity to explore areas of mutual interest over time" and added that "it is not our intention to acquire control of Churchill."
By selling its 14.7 per cent ownership of Churchill less than six months later, Aecon holds true to its word, but the looming question is, why now? Aecon announced it will make a pretax gain of about $2-million, a minuscule profit.
The answer could have something to do with Aecon's latest quarterly earnings, which came in much lower than expected. However, Mr. Beck attributed it to other reasons in a statement. "Disposing of our stake in Churchill allows us to continue to focus on the fundamentals of our business, including the continuing integration of our buildings and infrastructure businesses, establishing Aecon Mining, and strong project execution," he said.
Raymond James served as Aecon's agent in the sale.