“I don’t think so.” In a nutshell this was the response from the Curro board following Advtech’s announcement on Tuesday that it will not refer Curro’s offer to its shareholders for consideration. It summarily withdrew the cautionary relating to discussions between the two companies.

Curro responded with a further, more detailed cautionary announcement.

This suggests that Curro’s management has been in discussions with the Advtech board, on its desire to acquire the company, since late April. When the parties stalled on price negotiations, Curro took an offer of R13/share to Advtech’s largest shareholders including Coronation and Kagiso Asset Management, which hold about 40% between them. “The offer is acceptable to the major Advtech shareholders,” Curro says in the statement, without naming the specific shareholders.

The offer represents a 42% premium to the 30-day volume weighted average price of Advtech at 28 April 2015. It is also north of most analysts’ estimates of fair value, which range from R11 to R12/share.

The offer will see roughly 2,59 Advtech shares swopped for every one Curro share, with Curro valued at R33,65/share.

Significantly, the deal also includes a cash consideration for those shareholders that wish it. Curro has offered a minimum of 50% cash, increasing to 100% cash for smaller shareholders. The latter part of the offer will be possible, Curro says, because some of the major shareholders have indicated a preference for Curro shares.

Kagiso Asset Management is one of the Advtech shareholders that has indicated its support for the deal.

The Curro offer represented a substantial premium to the prevailing market price of Advtech, says Simon Anderssen, Kagiso Asset Management investment analyst. “And we believe this fairly valued Advtech’s operations and its exciting growth strategy.”

Kagiso is not blind to the opportunities and risks of the extraordinary growth it forecasts in Curro’s cash flows over the next stage of its business cycle, but believes that the deal is appropriately valued.

By supporting the offer, Kagiso, the second largest shareholder after Coronation, believed that Curro could proceed with negotiations with Advtech. The ultimate goal of this would have been the public announcement of the terms of the deal in order to allow all shareholders to evaluate the offer independently, Anderssen says. “We are therefore disappointed that the board of Advtech has decided not to refer Curro’s offer to all shareholders.”

He notes that while Curro and Advtech had disclosed that they were in negotiations, the public and most shareholders did not know the terms of the transaction. This meant that only those shareholders privy to the terms of the deal would have been in a position to unequivocally state their position on the transaction.

Without inside knowledge most analysts and other commentators assumed any offer would be settled through a swop of Advtech shares for highly rated Curro shares. This was unattractive to many shareholders who were unwilling to accept Curro shares for their Advtech investment.

“Many of these shareholders may have been satisfied with the option to receive a very high proportion, if not all, of their Advtech investment in cash, and at a premium to current market prices,” Anderssen says.

“Crucially, the board’s decision has deprived the general body of shareholders this opportunity.”

He adds that Kagiso is concerned by the board’s lack of transparency in their withdrawal of cautionary, which cites the best interests of the Company but which marginalises the view of their largest shareholders.

AdvTech’s shares jumped 5,2% to R12,20 on Wednesday, while Curro fell 0,6% to R34,30.