Bytes Technology Group (BTG) has made an offer to buy CS Holdings (CSH) at an effective price of 15.68c a share.
According to the offer document, which was posted at the weekend, BTG is offering to acquire the entire issued share capital of CSH by issuing BTG shares in the ratio of one BTG share for every 37 CSH shares held.
This implies a price of 15.68c per CSH share based on the closing prices of BTG and CSH shares on 12 August, which was the day before BTG disclosed its firm intention to make an offer.
Parent company Allied Electronics (Altron) has undertaken to purchase the BTG offer shares for 555c each if a CSH shareholder does not wish to retain them.
BTG says there will be no increase in either the offer consideration shares or the Altron option price.
The market has been awaiting the offer for some months. Bytes was named as the preferred bidder for CSH in June after three previous suitors - Reunert, Enterprise Outsourcing Holdings and UCS Group - decided not to make an offer.
Reunert, the original suitor, had intended to offer 35c a share for CSH when talks were first announced in April.
CSH`s recently published results for the year to end-June showed that the group is technically insolvent. On 30 June CSH had a negative net asset value per share of 5.61c, as well as a negative net tangible asset value of 14.8c a share.
Acting CEO Dave Vink said at the time that the group was dependent on the support of its bankers, which would be impossible without the backing of a "white knight".
Subject to extensions, BTG`s offer opened on Friday and closes on 29 October. The offer is subject to certain conditions precedent, including that CSH shareholders holding in aggregate not less than 90% of the issued share capital accept the offer.
This will enable it to acquire compulsorily all shares and delist CSH from the JSE.
BTG has so far received conditional undertakings with regard to more than 86% of the issued share capital of CSH.
CSH`s independent financial advisor, Bridge Capital, has deemed the offer to be fair and reasonable to CSH shareholders and the CSH board is recommending that CSH shareholders accept the offer.
The CSH share was untraded at 18c this morning while the BTG share was trading at 670c by late morning, down 5c or 0.74% from Friday`s close.
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