The consortium that was bidding to buy out the distributor may put a new offer on the table, says Mustek founder and CEO David Kan.
This week, the listed company withdrew a cautionary announcement relating to talks it was in with a consortium, led by CEO and founder David Kan and the Trinitas Private Equity Fund, to buy it out.
The deal was initially announced in December, but hit a snag after the implementation of the new Companies Act was delayed from April to May. The consortium offered to buy out shareholders at R5.55 a share.
Had the deal gone through, Mustek would have been de-listed from the JSE and Kan would have increased his holding from 10% to 50% plus one share. Kan says the cautionary was withdrawn, because the South African Revenue Service (SARS) has repealed a section of the new Companies Act.
Kan says the deal has been taken off the table, for at least two months, while the consortium and its financiers work through the implications of the change to the Companies Act.
The SARS amendment could lead to the structure that had been envisaged being less “tax friendly”, because the company wouldn't be able to deduct interest on the debt that it would introduce when buying out the company.
As a result, says Kan, the consortium needs to understand the implications of the amendment and whether it may have to develop a new company structure in order to buy out Mustek and delist it.
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