JSE-listed private education group Advtech has rejected an unsolicited offer from rival Curro to buy it, sending its share price plummeting.
“Shareholders are advised that the board of Advtech has unanimously resolved that the proposal is not in the best interests of the company and therefore not to pursue further discussions with Curro regarding the proposal made by them,” Advtech said on Tuesday.
The company said it had spent a “considerable amount of time” considering Curro’s offer.
Advtech interim CEO Frank Thompson said in a statement: “The draft proposal received was not a firm offer as it was hedged with a number of unacceptable pre-conditions including the furnishing of confidential information to a competitor.
“It could also have led to a situation where Advtech was unable to pursue its exciting growth strategy for a protracted period while waiting for implementation of the proposed transaction, which the board considered unlikely to succeed.”
Thompson said Advtech has “strong foundations in place” and an “enviable reputation for quality and student achievement”.
Advtech’s share price tumbled by nearly 8% shortly after it revealed it had spurned the Curro offer. It later recovered to close the day down by 3%.
Advtech and Curro, which are both listed on the JSE, are South Africa’s biggest private education companies. Both companies have fared well in recent years on the back of strong demand for private school education.
Advtech’s share price has rallied strongly in recent weeks after beating analyst expectations for its earnings for the six months to 30 June 2015. In a trading statement, it said it expects both basic and headline earnings per share to be between 20% and 30% higher than the same period in 2014.
This is as a result of “strong performance in all three divisions, driven by organic growth augmented by the benefits of the successfully implemented investment programme of the past few years”. — (c) 2015 NewsCentral Media