Vox Telecom has received a R500 million offer to buy it out and delist it from the JSE's alternative exchange.
In a statement, the company says it has received a written notice from a consortium composed of the Lereko Metier Capital Growth Fund and Investec Bank, to make a firm intention to buy the company out at 45c a share.
The company says shareholders could keep their investment and swap 10 shares in Vox for one in the consortium. Shareholders can also opt for a combination of both. The company's shares are currently trading at 42c a share.
The telecoms company says its goal of raising capital through its AltX listing has not materialised as it had expected, mainly due to a lack of institutional investor support for small cap firms.
It says due to recent regulatory announcements, which have provided more certainty for the telecom sector, Vox has been adjusting its business strategy. It says delivering on the strategy would be best in an unlisted environment so that “management can focus on the business without distraction, particularly as there is potential for pressure on short term profitability”.
Vox says without the costs of remaining and compliance requirements of being listed, it can better achieve its goals. “The private equity shareholders are long term investors who are committed to building the business by supporting it as required,” it says in a statement.
Cash or shares
Wallace adds the deal will facilitate Vox's future growth strategy, with benefits for all stakeholders.
If the transaction is approved, the current management team will be strengthened with the addition of Angus MacRobert who will join the newly delisted company as joint CEO alongside Doug Reed, Vox's current CEO. MacRobert is a former CEO of Internet Solutions.
Reed says, if the deal is approved, the company will “benefit from the backing of strong and experienced shareholders, while the delisting frees management to focus on sustainable value creation without the short term reporting pressures of the public market”.
The independent board of Vox Telecom has considered the terms of the offer, and based on the information currently available to it, is unanimous in its support for the proposed transaction, subject to receiving a favourable opinion from KPMG, the independent advisor to Vox.
The offer follows the completion of a limited due diligence process by the consortium and is subject to the fulfilment of a number of conditions in respect of the Scheme. These include, among others, shareholder approval as well as approval by the JSE, SA Reserve Bank, the Takeover Regulation Panel and the South African competition authorities.
The Lereko Metier Capital Growth Fund has an existing 24,8 percent stake in Vox.
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