Long-troubled technology group Gijima looks set to delist from the JSE after chairman Robert Gumede’s Yebo Guma Investments made an offer on Tuesday evening to buy out the remaining minority shareholders.
Guma has offered to buy out the remaining shares, totalling 6,9m, not already held by Guma companies.
Gijima minority shareholders are being offered R2,20/share in cash. That’s a premium of 47% on the company’s closing share price of R1,50 on Tuesday. It represents a 10% premium to the price of the recent R100m rights offer after adjusting for a share consolidation that took effect on 19 January. It is also a 31% premium to the volume weighted average price of R1,68/share over the past 30 days.
The offer by Guma to buy out the minorities was seen as inevitable after the rights offer, which took place in December, saw Gumede-controlled entities increase their stake in Gijima from 46,7% to 88,4%, leaving a small free float of 11,6%.
“Given the small remaining free float and the current status of the company’s turnaround, which is ongoing, Guma believes it is in the best interests of the company to be held 100% by the Guma entities and to delist, thereby enabling it to complete the turnaround in an unlisted environment,” Gijima said in a statement to shareholders.
This won’t be good news for shareholders who have experienced a massive destruction in their investment in recent years. In the past year alone, Gijima has lost almost 90% of its value.
The offer is subject to the approval of the JSE and the Takeover Regulation Panel, among others. It must also be approved by 75% of the shareholders eligible to accept the offer.
Asset managers collectively representing 3m offer shares — or 43,4% of the total, have already committed to either vote in favour of or recommend to their clients to vote in favour of the deal. They include Allan Gray, Investec and Futuregrowth.
Nonexecutive directors Malcolm MacDonald and Jacobus van der Walt, who own a combined 2,7% of the offer shares, have also agreed to vote in favour. — © 2015 NewsCentral Media