Dynamic Technology Holdings (DTH) will leave the JSE if an offer from Xantha Properties, to buy it out for R30 million, is accepted.
DTH is an empowered software and services business, and provides software solutions, mostly based on the Microsoft platform. The company employs more than 140 staff and has offices in Johannesburg and Cape Town.
Its focus sectors include retail, financial services and telecommunications.
The company, which was formed in 1999, says the cost of maintaining a listing is not worth it, especially as its shares are rarely traded and it would find it difficult to issue stock for cash to fund an acquisition.
The value of DTH's stock has dropped significantly from when it listed in November 2007, when it traded at R1 a share, to current levels of about 70c. Its 52-week high was 90c on 24 July 2009, while its year low was 60c on 1 February this year.
In addition, the company has recently seen its profits decline. In the year to February, its earnings dropped 21.2%, to R6.9 million, as its margins came under pressure due to rising costs.
As a result, it believes that being bought out by Xantha and delisted is the best way to unlock value for DTH shareholders and the group by providing interested shareholders the opportunity to exit their investments in DTH.
“In addition, this will afford management the opportunity and resources to focus on operational issues within an unlisted environment, without the distraction of regulatory and shareholder matters,” the company says in an announcement to shareholders.
Xantha, which is mostly controlled by some of DTH's management team, is offering R30 million for 28.8 million DTH shares. The bid equates to R1.05 a share, which is 50% higher than its current share price of 70c.
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