The Comparex share this morning gave up some of the gains it made since the group said before the long weekend that its shareholders would receive a further R1 dividend per share in addition to the R5.50 previously announced.
On Thursday the group issued a circular to shareholders in which it gave notice of a general meeting to vote on a final cash distribution and dividend in specie of Comparex Africa Group shares, the listing of a new entity and the delisting of Comparex Holdings, among other things.
The dividend in specie involves the distribution of one share in Comparex Africa Group - the venture owned by Comparex and empowerment partner Business Connexion - for every Comparex share held.
The Comparex share price, which had already been moving upwards since an earlier dividend announcement, rose by 27c or 5.2% to close at 549c last Thursday, increasing another 11c to 560c on Tuesday.
However, late this morning the share was trading at 505c, down 10c from Tuesday`s close.
Comparex`s restructuring is aimed at eliminating unnecessary layers in the group structure, to simplify the financial reporting and to allow for the efficient distribution of surplus cash.
New structure
After the restructure Comparex shareholders will hold their Comparex Africa Group shares directly and will have received all the surplus cash by way of a dividend in anticipation of the liquidation.
Comparex Africa Group will be renamed Business Connexion Group, which will be listed on the JSE, while the operating company, Comparex Africa, will be renamed Business Connexion.
The cash surplus has been a source of controversy in recent years, sparking a shareholder revolt and boardroom coup in June 2002, when institutional investors ousted five Comparex directors and replaced them with their own nominees.
Comparex had for some time been sitting on a R3.5 billion cash pile, mainly the result of the sale of its European networking operations to Dimension Data in 1999.
The investors were concerned that the remaining loss-making European operations were draining the group`s cash and felt that Comparex would do better to offload those operations and distribute the remaining cash to shareholders.
After the board was reconstituted the European business was disposed of to existing management, including former Comparex CEO Rian du Plessis.
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