Still no offer for CSH

By Iain Scott, ITWeb group consulting editor

Johannesburg, 10 Jun 2004

The CS Holdings (CSH) share has been languishing below 30c while the market waits to see whether a bid will be made for the group.

The insecurity is being fuelled by, among other things, a delay by JSE-listed EOH in announcing whether it still intends making a bid for CSH.

Although EOH said in mid-May that it would be prepared to make a bid within 10 days, no further announcement has been made. EOH director Rob Sporen says he is unable at this stage to comment on the process.

At least two other potential buyers - JSE-listed companies Reunert and UCS Group - have backed away from making an offer. An analyst says the combination of two companies walking away and EOH`s delay in putting an offer together is cause for concern.

Reunert, already a shareholder in CSH, was the first company to make public its intention to bid for the group, saying in late April that it would offer 35c a share. The share, which closed as high as 75c in January, had by April plunged after allegations relating to CSH`s accounting practices.

Although analysts were divided on whether the price was fair to minority shareholders, the CSH share traded between 33c and 34c for the next few weeks until EOH entered the process in mid-May, saying it also planned to make an offer.

The CSH share jumped to 37c on the news, although it slipped back to 33c when Reunert said it would not make an offer after all, blaming a breakdown in talks on a failure to agree on certain issues. A few days later UCS Group also announced plans to make an offer, but backed off at the beginning of this month, citing external factors rather than problems with the CSH business.

The CSH share has traded in a range between 22c and 30c since late April. It was trading at 29c this morning, unchanged from yesterday`s close.