Shareholders of Singapore-listed Datacraft Asia have given SA- and London-listed Dimension Data (DiData) the go-ahead to purchase the 44% of the business it does not already own.
According to a DiData announcement this morning, stakeholders have agreed to give up their shares for $1.33 each. This brings the total value of the remaining Datacraft stake to $276 million, which DiData says will be cash raised in part by an issuance of equity.
The scheme must still be approved by the Singapore authorities; however, should it be cleared, Datacraft will be delisted from the country's exchange.
The Datacraft share has not performed well in the past five to six years and has not proved to be liquid. In an earlier interview, Kevin Handelsman, DiData's investor relations spokesman, said maintaining the Singapore listing had not been a valuable solution. “It's not raising funds and it is taking a lot of management time and effort,” he added.
The group says Datacraft Asia has not raised any funds from the capital markets since 2000, and the fact that it has $162.7 million cash holdings means it is unlikely to need to do so in the foreseeable future.
DiData bought a controlling stake in Datacraft in 1997. The group says that since then, there has been an increasing alignment of the strategic and operating models of both companies. Greater efficiencies would result from 100% control, it says.
The company has also indicated that at some point it will rename Datacraft, although this would not happen in the near future. While the company has gained approval from shareholders, there are still legal and regulatory hurdles to overcome, and it does not expect the deal to be concluded quickly.
At the time of publication, DiData shares had shown a day's increase of 3.36%, to R5.85. The share price closed down 4.96% yesterday at R5.52.
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