Canada`s DataMirror Corporation has increased its stake in hostile takeover target Idion to more than a third after institutional investor Coronation sold its shares at 180c each.
However, Idion financial director Willem Richard says Idion did not have to rely on Coronation`s support, with 54% of Idion`s shares "locked up".
The company is expected to make an official response tomorrow to DataMirror`s final offer of 180c a share.
Richard says that Metropolitan, which owns about 6% of Idion`s shares, has undertaken not to sell at less than R4, "but they have an escape clause where they could respond potentially differently if the feedback from [independent advisor] PricewaterhouseCoopers deems the offer to be fair and reasonable".
Coronation, which held about 10% of Idion, sold its stake despite earlier comments by Coronation`s Sunil Shah that he would not sell at under R3.
Shah says Coronation decided to sell after considering "the prospects of them [DataMirror] walking away and there being no home for a large number of shares".
"If they had decided to sell their shares on the market it would have been a very difficult time for Idion.
"Although my intrinsic value was a lot higher, and I was quite obstinate about it, we did raise their bid from 65c to three times that by being very adamant on intrinsic value."
DataMirror bought about 14.9 million shares over the past two days, increasing its stake in Idion to about 33.9%. It adds that with other acceptances its stake is now 34.12%.
"It`s sad to lose an institutional shareholder, but, and I think [Idion CEO] Nicolaas [Vlok] may have alluded to this earlier, there are other very interested parties.
"If the DataMirror bid comes to nothing at the end of the day, in other words it is unsuccessful as far as control is concerned, perhaps it provides one with an ideal opportunity to have a single point of negotiation where you can move shares from. So we don`t see it as a negative necessarily."
However, DataMirror CEO Nigel Stokes says Coronation`s sale "is a strong vote of confidence in DataMirror`s bid".
"Large shareholders have chosen to support our bid and accept certain value now. We believe Idion`s independent committee and board cannot afford to ignore this vote of confidence given to us by these major shareholders."
The Idion share was trading unchanged at 180c on the JSE late this morning.
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