Speculation that data management company MGX is eyeing CCH has intensified after an announcement by MGX that it is set to acquire the minority interests in EC-Hold.
The acquisition of minorities will lead to the delisting of EC-Hold, which specialises in the provision of integrated solutions and enabling technology in the secure e-business environment, information security and information management.
The announcement has added to speculation that MGX is interested in acquiring CCH, since e-business is at the core of all of CCH`s business units, although CCH CEO Aletha Ling has been reported as saying that no formal talks are underway.
An analyst says he does not believe MGX would want to buy the whole of CCH, but might well be interested in parts of it.
The rumour began after large volumes of CCH shares traded in late July. A source close to the company says a large deal was made through Rand Merchant Bank, which backs MGX.
The volumes alerted the JSE`s surveillance department, but Ling has said there was nothing sinister in the deal.
The analyst says an acquisition by MGX "could make sense if they want parts of it, especially if they are now moving into security and want to get involved in e-commerce, but they certainly wouldn`t want Infracom".
Although it has also been suggested that MGX may be interested in CCH for an asset strip, he believes the group is not cheap enough.
The CCH share was trading 15c down at 520c this morning. Its net tangible asset value at the last year-end was 160.1c a share.
"The last results were bad. Out of the five divisions, two did well, one broke even, and two did badly. I don`t know if it is even worth a strip."
The analyst says MGX is a good company and has shown solid growth since listing. Although it dominates the storage market, "if it wants to move from being a mid-size company to a big player it would have to look at other areas".
MGX is offering EC-Hold minorities 100c a share, which represents a 10c premium to the price on 4 September, when serious talks began. The share was unchanged at 96c this morning.
The deal is subject to regulatory approval as well as that of 75% of the minority shareholders.
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