Altech says it will seek other alternatives to enhance its black empowerment profile after a proposed deal with Labat Africa was called off.
The group adds that the announcement by Labat Africa about talks being called off needs clarification.
Labat Africa said yesterday that the R180 million deal, which would have seen Altech subsidiary Altech Data acquiring from Labat 100% of South African Micro-Electronic Systems, 51% of Labat Traffic Solutions and 100% of Labat Africa Management Consulting, was called off because of a disagreement on the price and funding of the Altech Data businesses.
The Labat businesses were to be merged with Altech`s IT interests, all of which are held by Altech Data. A consortium owning about 60% of Labat Africa would have reinvested its part of the proceeds to buy a 50.1% stake in the new merged entity.
A special purpose vehicle set up by Altech was to fund the outstanding balance of R39 million.
"Neither of us found anything wrong with the other`s assets - no fundamental problems," says Altech director Peter Curle.
"Having regard to some trading issues, we decided that the relative values should be adjusted slightly in our favour. From a Labat shareholder consortium point of view, this was quite a big transaction already, requiring some additional funding by Altech to them.
"This would have required additional funding of several million more, and it just became a little unpalatable from their point of view - the size of the overall deal and the funding required - and it just pushed it slightly out of what they wanted to pay.
"It`s unfortunate. A lot of work was put into it on both sides, but these things happen."
He says the announcement needed clarification because whereas the Labat statement may have inadvertently given the wrong impression that the valuation should have been adjusted downwards, the sticking point was the upward adjustment of the Altech Data businesses.
Curle adds that the talks ended on a friendly basis. "We work with them from time to time on projects and we will continue to do so. There is a good friendship between our groups."
He says the group will be looking at other ways of enhancing its empowerment credentials.
"This was a fairly radical and revolutionary approach. We were actually proposing to hand over ownership control and day-to-day management control to an empowerment group. We would have had board control, but they would have had 50.1% and day-to-day management control, which was pretty revolutionary within the sector.
"However, we will be looking for alternatives, and we have some ideas, but we don`t have anything that we can announce next week, because we don`t run discussions in parallel in case one falls through. But we will be back to the drawing board and hopefully we will have an alternative shortly."
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