The Takeover Regulation Panel (TRP) has found that Mustek shareholder the DK Trust is a “concert party” to printing and packaging firm Novus Holdings’ bid to acquire a controlling share in JSE-listed technology group.
Following an investigation, the TRP concluded that Novus acted “in concert” with the DK Trust – created by late Mustek founder David Kan – in setting up the transaction, a move that may have disadvantaged smaller shareholders in Mustek.
The protection of minority shareholders is part of the core mandate of the TRP, an independent body reporting to the minister of trade, industry & competition whose function is to enforce the takeover regulations stemming from the Companies Act.
“Having carefully considered the factual background, legal framework and submissions presented in this matter, the panel concludes that the DK Trust acted in concert with Novus for the purposes of the mandatory offer,” said the TRP’s ruling.
But the TRP’s findings are unlikely to stop the deal from going ahead. According to Novus CEO André van der Veen, the only party materially affected by the ruling is the DK Trust, which will for six months after the conclusion of the deal be barred from buying Mustek or Novus shares.
Speaking to TechCentral on Wednesday, Van der Veen said that although Novus disagrees with the TRP’s findings, the statutory body’s internal appeal mechanisms are non-existent because trade minister Parks Tau is yet to appoint the relevant staff member to fulfil the function. This leaves Novus with no other option but to take the matter to court if it wants to rectify the disagreement, but Van der Veen said this will only delay the deal without any substantial benefit to the stakeholders involved.
Mustek offer
“We don’t agree with the TRP’s conclusions; we think they made an error in their judgment. However, we will continue to make the offer and post it in the circular on the due date,” Van der Veen said.
Novus was legally compelled to make a mandatory offer to Mustek shareholders in November last year after its shareholding in the tech company breached the 35% mark. An offer comprising a cash consideration of R13/share; or a cash amount of R7/share plus one ordinary share in Novus for each Mustek share held; or two Novus shares for each Mustek share tendered was then made to shareholders.
Mustek CEO Hein Engelbrecht told TechCentral last November that he, along with Mustek MD Neels Coetzee and the DK Trust, would not accept the mandatory offer from Novus as they wished to remain invested. Together they hold 11.7 million Mustek shares, or 20.3% of the total. Engelbrecht couldn’t be reached for comment on Wednesday.
TCS Legends | Remembering Mustek founder David Kan
The TRP’s investigation found that the DK Trust on 13 November 2024 signed a written waiver in which it “irrevocably and unconditionally” stated it would not accept the mandatory offer or dispose of any of its Mustek shares until the offer’s closing date. This action raised eyebrows at the TRP, which found that the signing of this waiver was not merely incidental but actually “a critical enabler” of Novus’s mandatory offer.
“By irrevocably committing not to accept the offer or dispose of its Mustek shares, the DK Trust reduced Novus’s financial exposure by approximately R123-million. This reduction was essential for Novus to proceed with the offer, as it lowered the required bank guarantee from R459-million to R335-million. The submission itself acknowledges this, stating that the undertaking was provided ‘solely for the purpose of reducing Novus’s exposure in respect of the bank guarantee’,” said TRP’s ruling.
The TRP also found that the DK Trust was actively involved in discussions and arrangements leading up to the mandatory offer. According to TRP’s ruling, Engelbrecht, who TechCentral understands is also a trustee of the DK Trust, on 17 October last year engaged with Novus regarding special share acquisitions and subsequently facilitated discussions with the DK Trust.
Read: Novus Holdings in surprise bid to acquire Mustek
The DK Trust on 8 November passed a resolution authorising the sale of Mustek shares by its wholly owned subsidiary MEP to Novus. On 12 November, DK Trust’s undertaking was made a condition of a consortium agreement, which solidified the mandatory offer.
The deal cleared a separate hurdle earlier on Wednesday when the Competition Commission announced that it had given its nod to the deal, with conditions. – © 2025 NewsCentral Media
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