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Altech buyout gets shareholder nod

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 26 Jul 2013
Altech and Bytes have many synergistic areas of business, says Altron CEO Robert Venter.
Altech and Bytes have many synergistic areas of business, says Altron CEO Robert Venter.

Altech minority shareholders today voted in favour of a R1.8 billion offer from Altron to buy their stock at R47.50 in a move that will see Altech delisted.

Altron will take its ownership of its biggest revenue contributor from 61% to 100% and aims to remove any overlaps between businesses and build on its convergence strategy. Altech accounted for revenue of R10.4 billion of Altron's R24.8 billion income in the year to February.

Altech has seen its share price gain since the announcement and was trading at R46.80 just before noon today, giving it a market capitalisation of R4.97 billion.

Shareholders, excluding Altron, voted on the deal today. In order for the transaction to be approved by special resolution, a minimum of 75% of the minority shareholders had to vote in favour of the offer.

In a statement, Altron says: "It is expected that the transaction will result in a more investor friendly structure for the Altron group with only a single JSE listed entry point. It will also achieve more efficient capital allocation within the group and further enable convergence synergies to be unlocked."

Altron CEO Robert Venter says "convergence of the telecommunications and IT sectors means that Altech and one of our other wholly-owned subsidiaries, Bytes, now have many synergistic areas of business. Fully owning Altech will enable us to unlock these synergies, streamline our group structure and improve our go-to-market in terms of more focussed offerings to clients."

This is the second time Altron has made a buyout bid for Altech, after shareholders rejected an offer made five years ago. Towards the end of 2007, Altron offered R4.8 billion to Altech and Bytes Technology Group minority shareholders to bring both companies into the fold.

Bytes has subsequently become an Altron subsidiary and is its third-largest contributor to revenue for the financial year that closed at the end of February. Since 2001, Altron has brought partly-owned subsidiaries back into the fold, reducing the amount of companies from 10 to two.

Altech CEO Craig Venter says "the synergies between other Altron operations and Altech are already tangible and we look forward to exploring this further now that the acquisition has been approved. The combination of Altech and Bytes will consolidate industry know-how that will be crucial in pursuing new opportunities".

Altech will delist from the JSE on 20 August 2013.

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