Prism Holdings is selling 16.98% of its shares to company Mineworkers Investment Company (MIC) in a black economic empowerment deal priced at R36 million.
Prism is buying back about 100 million shares from existing shareholders at a ratio of 16.89 shares for every 100 held.
The buyback has been set at 36c a share, a 7.7% discount to the Prism share`s closing price of 39c on the JSE on Wednesday.
"The Prism board considers such a discount important for the sustainability of the black ownership initiative and Prism`s ability to meet the requirements of the ICT charter," the group says.
The deal, which is subject to the approval of at least 75% of Prism shareholders, is to be funded through a combination of vendor finance, funds from MIC and third-party funding.
The group says its financial position at 30 June, together with continued positive trading, has resulted in more cash than it needs, allowing it to use some of the money to ensure the success of the deal.
The issue of additional shares to MIC at market price would not be value-enhancing to existing shareholders, it adds.
"We are absolutely delighted that we are able to fund a substantial portion of this transaction internally," says Prism financial director Jan Hnizdo.
"Another benefit from our perspective is that although MIC is a relative newcomer to the technology arena, we anticipate valuable input and advice regarding Prism`s ongoing transformation programme."
MIC recently acquired 25% of document management company Metrofile, from holding company MGX.
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