Novus to appeal after being told to hike Mustek bid — Mustek’s head office in Midrand, Johannesburg

The plan by Novus Holdings to acquire technology group Mustek has run into more difficulty, with the Takeover Regulation Panel ruling it must increase its offer to Mustek shareholders in a move that could cost it tens of millions of rand more than anticipated.

The Takeover Regulation Panel has found that Novus must raise its offer to Mustek shareholders from R13 to R15.41/share – and increase 18.5% – because one of Novus’s brokers is deemed to have acted in concert with it in pursuing the technology distributor. Novus has said it strongly disagrees with the decision and will appeal.

Novus’s pursuit of Mustek has been one of the more unusual corporate transactions on the JSE in the past year. It pairs a commercial printing group with one of South Africa’s best-known IT distributors. As TechCentral has previously reported, Novus steadily built its stake in Mustek before triggering a mandatory offer under takeover rules once it crossed the 35% ownership threshold.

A mandatory offer is a rule designed to protect minority shareholders when control of a listed company changes. Under the takeover regulations, once a shareholder (alone or together with parties acting “in concert”) passes 35% ownership of a company, that shareholder must make an offer to buy out all remaining shareholders at a fair and equal price.

In the Novus/Mustek case, crossing the control threshold triggered a mandatory offer by Novus. The dispute now centres on whether a broker-linked purchase counts as part of Novus’s actions – and therefore whether the offer price must rise.

Following an investigation that began last August, the TRP’s ruling – that broker Numus should be treated as a concert party – reflects the regulator’s focus on preventing unequal treatment of shareholders in takeover situations. But Novus is not amused.

“Notwithstanding the submissions made by Novus and one of its brokers, Numus Capital, the TRP determined that Numus is a concert party of Novus for the purposes of the mandatory offer. Novus fundamentally disagrees with the conclusions reached by the TRP in this respect…,” Novus said in a statement to investors on Friday.

R55-million

“Mustek shareholders are advised that Novus fundamentally disagrees with the conclusions reached by the TRP in respect of, inter alia, this determination and intends appealing to the takeover special committee to have the TRP ruling set aside.”

According to Novus, a regulated hedge fund managed by Numus brought 3 000 Mustek shares at R15.41/share on 28 November 2024. That equates to an acquisition cost of just R46 230, but it may end up costing Novus as much as R60-million if it is forced to hike its offer to Mustek shareholders, according to calculations on Monday by the Finance Ghost, a pseudonymous commentator on South Africa’s financial markets.