Altron completes Bytes demerger, shareholders get R10.9bn
JSE-listed Altron has completed the demerger of its unit Bytes group with shareholders raking in R10.9 billion.
In April this year, the IT services company announced that it was looking to demerge and separately list its Bytes UK subsidiary.
At the time, the company said its board concluded the true value of Bytes UK, a wholly-owned subsidiary of Altron, was not reflected in the company’s share price.
Said Mteto Nyati, Atron’s chief executive: “Now we feel it is time to be asking a different question – ‘how can we make sure that we get the right value for Bytes UK?’ That is the rationale – to unlock the value for Bytes UK.”
In a statement today, the company says Bytes has been admitted to the premium listing segment of the official list of the UK's Financial Conduct Authority, to unconditional trading on the main market of the London Stock Exchange, and the main board of the Johannesburg Stock Exchange by way of a secondary inward listing.
“This marks the completion of the demerger of the Bytes group from the Altron Group, a transaction which Altron announced to the market in April 2020,” says Altron.
It notes that the achieved price of £2.70 per Bytes ordinary share results in a market capitalisation at the issue price of approximately GBP 647 million (R13 billion) on admission.
The issue price was in the top half of the previously communicated price range of £2.40 to £2.90 per Bytes ordinary share, says Altron.
It adds that approximately 40% of the Bytes ordinary shares are distributed to existing Altron shareholders and the remaining shares are held by investors located outside South Africa, and Bytes management.
As a result of the demerger of Bytes, the company says, Altron shareholders will receive, after tax and transaction costs, a consideration of approximately GBP542 million (R10.9 billion) in the form of Bytes ordinary shares and cash.
“If this is combined with Altron’s current market capitalisation, excluding Bytes, of approximately R3.9 billion, Altron shareholders hold approximately R14.8 billion of value in Altron shares, Bytes shares and cash.”
Prior to Altron announcing the demerger on 2 April 2020, Altron’s market capitalisation was approximately R7.3 billion – through this transaction Altron has created over R7 billion of value for its shareholders, says the company.
“A shareholder who has held Altron shares from the time of the initial announcement to the completion of the demerger would have seen the value of their holding double. On the same basis, there has been almost a five-fold increase in shareholder value since the announcement in December 2016 of the investment by Value Capital Partners and the changes announced to the Altron board followed by the appointment of Mteto Nyati as CEO in April 2017,” says Altron.