Negotiations between the Calejero Consortium and Advtech to purchase the business of Advtech have been suspended before the due diligence even commenced.
In a brief statement to investors, Advtech advised that negotiations between itself and the investment consortium consisting of Jonathan Beare and Mark Barnes` Calejero had been terminated.
The consortium initially offered R185 million for the company in early January, which Advtech rejected out of hand saying it did not represent fair value for its brand names.
Advtech accepted the offer after the figure was upped to around R300 million or 75c per Advtech share, subject to further investigations.
"There were a couple of reasons for the termination of the deal before the due diligence, none of which I`m at liberty to expound on, but what I can say is that it was not price-related," says Advtech chairman Brian Buckham.
He adds that the company`s corporate advisor, Nedcor Investment Bank (NIB), is reviewing other opportunities to sell the business.
"Obviously our first priority is to keep our investors happy and they expressed a keenness over the original offer, so NIB will investigate all other proposals."
The IT staffing, education and recruitment company has seen a drop in its profits for the year to December and has been plagued by industry rumours that its group MD, Renny Plit, was leaving the company. Adding to Advtech`s woes is the pressure the education and staffing sector as a whole has experienced of late on the JSE.
The Advtech share price took a nosedive after the announcement, losing 8.1% or 3c to trade at 34c by midmorning.
The share bounced 23.7% on the original news in January that the company was to be sold.
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