HTHIY Hitachi Ltd (PK)

MELBOURNE, Australia—Australian manufacturer Bradken Ltd., a frequent bid target in recent years, has accepted a 688.5 million Australian dollar (US$527.4 million) offer from Japanese construction and mining-machinery supplier Hitachi Construction Machinery Co.

Hitachi Construction said in a statement released to the Australian stock exchange on Monday that it would offer A$3.25 a share for all of Bradken. In the absence of a superior bid and subject to an independent expert concluding the offer was fair, Bradken's board unanimously recommended shareholders vote to accept the deal.

"It lets Bradken, which has a proud history in mining and industrial services, join with one of the world's largest machinery companies," said Phil Arnall, chairman of the Australian company.

Bradken, which named Mr. Arnall as chairman in September 2015 and in February appointed Paul Zuckerman as its new chief executive, earlier this year said it would seek to divest noncore operations as it tightened focus on its mining-parts and North American-engineered productions divisions. It narrowed its net loss to A$195.9 million in the year ended June 30 and reduced its debt 12% to A$352.4 million.

In April, Bradken rejected a recapitalization proposal from Champ Private Equity that would have seen Champ's stake in the company jump from 3.1% to as much as 49.9%.

In mid-2015, a consortium of Champ and Sigdo Koppers SA proposed a merger between Bradken and Sigdo's Magotteaux Group subsidiary, but the suitors ended talks in September that year. Earlier that year, Bradken's board turned down a nonbinding takeover bid from Koch Industries Inc. and Pacific Equity Partners, and at the start of 2015 Pacific Equity Partners and Bain Capital LLC ceased takeover talks with Bradken after their approach was roiled by turmoil in financial and commodity markets.

On Monday, Bradken said the agreed offer from Hitachi Construction marked a 34% premium to the previous closing price for its shares.

The offer is conditional on Hitachi Construction securing more than 50% of Bradken's shares and relevant regulatory approvals. The Japanese company, which is about 50% owned by Hitachi Ltd., has agreed to provide Bradken with a A$450 million credit facility to help it, if necessary, repay U.S. private placement notes it has issued.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 03, 2016 07:15 ET (11:15 GMT)

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