Connection Group`s board is asking the IT retail group`s shareholders to support a scheme of arrangement that will see JD Group buy and delist the company.
JD Group is offering R14.75 per share for Connection, translating to about R500 million, with the offer being made through a scheme of arrangement in terms of section 311 of the Companies Act.
In terms of the Act, when an arrangement is proposed, a majority representing 75% of the votes exercisable by the members shall, if sanctioned by the court, be binding on all the members and on the company.
Connection says in a notice issued this morning that its independent advisor, Investec Bank, has examined the terms and conditions of the offer and is of the opinion that the offer is fair and reasonable to shareholders.
The JD Group says that if the scheme is not implemented for whatever reason, it will be deemed to have made a substitute offer to the scheme members, also at R14.75 a share, conditional on shareholders owning 90% of the shares accepting that offer.
Investec`s assessment of fairness and reasonableness extends to that substitute offer.
Should the scheme be implemented, the Connection share is to be suspended on 14 November and delisted on 22 November.
Connection says the dates are subject to change, but it will keep the market informed of any changes.
Excluded from the scheme are Connection Group subsidiary Software Connection (which owns treasury shares) and the Connection Group Holdings Share Trust Scheme.
The group adds that shareholders, other than the excluded parties, owning 62.7% of the shares held by scheme members, have indicated their support of the scheme.
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Retailer to offer R500m for Connection
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