JSE-listed UCS has put a firm offer on the table to buy back point-of-sale company Argility, after initially selling it off almost three years ago.
The buy-back forms part of the company's move to return to its core business of retail-focused software and solutions.
UCS has been streamlining its operations and is now focused on the retail value chain, from store to distributor, deputy CEO Dean Sparrow commented last year.
During the past financial year, the company sold several non-core entities, which included DiverseIT, the enterprise solutions division of UCS Solutions and TSS Managed Services.
The company now intends to make an offer to Argility shareholders and will offer R1.55 for every Argility share. The price is a 210% premium on the over-the-counter informal trading price, says UCS.
When UCS sold its stake in Argility, in September 2007, the point-of-sale company's shares were calculated to be worth R5.81 each. At the end of September last year, Argility had 28.4 million shares in issue.
After the unbundling, shares were traded in the informal market, but trade was limited, with less than 5% of the company's shares being traded on the platform.
The result was that retailers locally and internationally froze spending on point-of-sale systems, says UCS. At the end of the last financial year to September 2009, Argility turned over R10.7 million, but made a R68 million net loss.
UCS wants to buy back Argility as part of its strategy to focus on the core retail sector, and believes this would result in cost benefits and synergies with the UCS Software Manufacturing division.
The deal should increase earnings per share by 20%, but will result in headline earnings per share falling as much as 109.6%. Its shares closed flat yesterday at R1.85.
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