The share price of JSE-listed technology group Gijima soared by more than 12% on Wednesday morning after it told shareholders it was in talks to dispose of its mining and consulting businesses, housed under the MineRP division, to a consortium led by RMB Private Equity subsidiary RMB Corvest.
Gijima said it was in the process of finalising the terms of agreements related to the possible disposal of MineRP. If the deal goes ahead, MineRP will be housed in a newly incorporated entity, Oakleaf Investment Holdings 89. The value of the proposed transaction has not been disclosed, but this didn’t stop investors pushing the share price up 5c to 46c by 10am on Wednesday.
Any transaction would be subject to the fulfilment of certain conditions, including the approval of the competition authorities, Gijima said.
“The board has identified MineRP as non-core and, as MineRP requires considerable investment to maintain its competitive position, has resolved to dispose thereof in order to preserve MineRP’s value and realise maximum value for shareholders.”
Irnest Kaplan, MD of Kaplan Equity Analysts, said it’s difficult to determine the significance of the sale until such time as Gijima says how much the deal is worth. “If they sell it for R50m, then it’s not material, but if it’s R150m or R300m, then it would be material.”
Kaplan, who owns shares in Gijima, says the company’s share price has been “knocked very low” and, depending on the value of the sale of MineRP, then the share could be cheap at current levels. — (c) 2012 NewsCentral Media
