VenFin forges ahead

By Iain Scott, ITWeb group consulting editor

Johannesburg, 08 Jun 2004

VenFin is pressing ahead with its offer to buy out Intervid minority shareholders at 34c a share, after which it will delist digital information systems company Intervid from the JSE.

VenFin and its subsidiaries previously owned 32.4% of Durban-based Intervid. However, the Competition Commission recently approved VenFin`s acquisition of another 30.24 million Intervid shares at 34c each from the Howard family shareholder block, taking its stake to 64.92% with effect from today.

In terms of the Securities Regulation Code on Takeovers and Mergers, VenFin is now obliged to make an offer to minority shareholders on at least the same terms.

Intervid shareholders are being presented two alternatives: to sell their Intervid shares to VenFin at 34c each or to exchange their Intervid shares for VenFin shares. This would be on a ratio of one VenFin share for every 60 Intervid shares held.

Trade in the Intervid share is to be suspended from 16 August, with the delisting scheduled for 24 August.

VenFin says Intervid is faced with significant challenges in achieving the goals of its turnaround strategy and "to be successful it needs to be totally flexible in its decision-making and execution abilities. An unlisted environment provides that flexibility."

It points out that VenFin associate RFS Holdings holds a convertible loan, which may be converted into Intervid shares in June 2005.

"Should the transaction not take place and should RFS decide to exercise its conversion rights, RFS would, at the current ruling share price of Intervid of 30c, hold 96.4% of Intervid post the conversion. Intervid shareholders would therefore be diluted by almost 28 times."