Mustek has pulled the plug on a plan to delist from the JSE, sending its share price plummeting. A consortium led by CEO David Kan and the Trinitas Private Equity Fund had wanted to execute a management buy-out of the technology company and take it private.
Kan says during the preparations for the buy-out the company had faced legal and regulatory uncertainty. The switchover from the old to the new Companies threw a spanner in the works, he says.
Mustek’s senior debt provider is also subject to these changes, so it needs time to reevaluate its options, Kan says. “We’ve opted to withdraw the cautionary in the meantime. Once we have a better understanding [of the issues], we can restructure accordingly, if necessary, and we will have a better idea of whether or not we can afford to undertake the enterprise.”
Mustek, which assembles PCs and distributes technology equipment and components, has been listed on the local bourse for the last 13 years. Kan told TechCentral earlier this year that over the past few years the company’s share price has not reflected the value of the group, hence the decision to try to buy out minority shareholders.
“The shares are also not very liquid and it just doesn’t make sense for Mustek to stay listed anymore,” he said at the time.
Kan and the Trinitas Private Equity Fund had wanted to buy out minorities at R5,55/share. That had been what shareholders Sanlam and Old Mutual, which together have about 45% of Mustek’s equity, requested for their support of the deal.
Kan, who estimates it costs Mustek between R4m and R5m a year, including all announcements and audits, to remain listed on the JSE, owns 10% of the group’s issued share capital and would have become the majority shareholder by one share if the deal had gone ahead.
The company’s share price was trading down nearly 10% at lunchtime on Tuesday after announcing plans to postpone the delisting indefinitely. — Staff reporter, TechCentral