DTH sets delisting date

Dynamic Technology Holdings' (DTH) shares will trade for the last time on 3 September, after the court approved a buyout bid.

In June, DTH told the market it had received an offer from Xantha Properties, which is largely controlled by some of DTH's management team, to buy it out for R30 million. The offer would result in DTH's listing being removed from the JSE, it said. Shareholders approved the buyout in July, and the court sanctioned the deal in mid-August.

After the court gave the go-ahead, director and company secretary Derek Hughes explained that the papers needed to be lodged with the Companies and Intellectual Property Registration Office, and a delisting date needed to be agreed with the JSE.

The company has alerted shareholders that its shares will be suspended on the bourse from Monday 6 September, and its listing will be terminated on 14 September.

Xantha bought 28.8 million DTH shares, which equates to R1.05 a share, a 50% premium on DTH's share price at the time of the announcement. DTH's shares closed at 102c yesterday, shooting up from 70c at the time of the news.

The company was formed in 1999 and listed on the JSE in November 2007. However, the cost of maintaining a listing was not worth the expense, as its shares were not well traded, which would make it difficult to issue stock for cash to fund an acquisition, said DTH.

In addition, profit had been slowing as its margins came under pressure because of rising costs. In the year to February, its earnings dropped 21.2%, to R6.9 million, because of margin pressure.

DTH explained that being bought out by Xantha and delisting is the best way to unlock value for its 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 said in the announcement to shareholders