Idion Technology Holdings says it has received a formal offer from Canadian-based DataMirror Corporation for the first time, despite talk that DataMirror had made an offer earlier.
DataMirror, which is offering Idion shareholders 65c per Idion share in a hostile takeover bid, has said that it tabled an offer to management before launching its bid to shareholders.
However, corporate communications director Corn'e Arnold says the company received the offer only yesterday, along with other Idion shareholders.
"This is the first time that we actually have an offer on the table, despite earlier representations to the contrary," she says.
"We want to assist shareholders to take an informed decision about the offer. We assure the market that, within the rules of the Securities Regulation Panel, we will communicate openly about the company, its financial position, its performance and its prospects."
DataMirror, which bought 16.4% of Idion`s issued share capital on the open market, announced its bid on 18 March. It says this followed delivery of a letter to Idion`s directors informing them of the intention to make an offer.
DataMirror`s offer values the existing issued share capital of Idion at about R73 million, which is a 71% premium to Idion`s 30-day trade weighted average as at 15 March and a 228% premium to Idion`s published net tangible asset value on 31 December 2001.
DataMirror CEO Nigel Stokes says his company`s "significantly greater financial strength, depth of management and global presence will materially enhance the Idion business and the prospects of both its management and employees. Together, DataMirror and Idion can establish a leadership position in the iSeries High Availability market."
He says Idion`s management has overseen a dramatic decline in shareholder value and has not met performance expectations. "It still expects to be loss-making at half-year."
However, Idion financial director Willem Richard says Idion is in a strong financial position and management believes it will be able to demonstrate this to a committee appointed to assess the offer.
The committee comprising non-executive directors has appointed PricewaterhouseCoopers Corporate Finance to provide independent advice on the merits or otherwise of the offer, and the assessment will be circulated to all shareholders within two weeks.
Arnold says that as the "highly conditional" offer closes on 19 April, shareholders "can afford to await the board committee`s assessment before taking a final view on the offer from DataMirror".
An analyst, who describes the offer as "highly opportunistic", says it is priced far too low and Idion management is unlikely to favour it.
"From what I`ve heard, many of the institutional shareholders are taking a dim view [of the offer], so if DataMirror still wants to achieve its goal it`ll have to raise the price.
"Idion has had its share of problems recently, but R73 million isn`t what I consider fair value for the company."
The Idion share price was unchanged at 90c on the JSE this morning.
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