Macmahon extends offer for Ausdrill

Macmahon Holdings Ltd says Ausdrill Ltd's share price is being propped up by on-market purchases from its managing director Ron Sayers and its $400 million takeover offer for the company.

Mining and construction contractor Macmahon on Thursday extended its all-scrip takeover bid for the drilling group to August 15 and brought into question factors that have "complicated the decision making process for Ausdrill shareholders".

Macmahon chairman Richard Carter said the company's takeover offer and share purchases by Mr Sayers have provided support for Ausdrill's share price.

"This brings into question the prospects for Ausdrill's share price in the absence of the Macmahon offer and share purchases by Mr Sayers," Mr Carter said in a letter to Ausdrill shareholders.

Macmahon, which is 14.6 per cent owned by Leighton Holdings Ltd, said that 40 per cent of share purchases in Ausdrill during the period from June 16 to July 3 had been acquired by Mr Sayers.

Ausdrill directors control more than 20 per cent of the company, with Mr Sayers the largest shareholder with about 14.29 per cent of the group.

Macmahon also questioned Ausdrill's decision not to provide its shareholders with the benefit of an independent expert's report into the takeover and the failure to publicly disclose the size of its order book.

Macmahon is targeting Ausdrill to gain a greater foothold in Africa and create a diversified mining contracting and civil construction company, with a market capitalisation of about $1.4 billion.

Shares in Ausdrill dropped one cent to $2.37 by 1254 AEST Thursday, while Macmahon put on half a cent to $1.605.