Idion Technology Holdings has claimed victory in its battle against hostile bidder DataMirror Corporation after DataMirror announced that its takeover attempt resulted in a 38.8% shareholding in Idion.
"From opening the offer on 25 March 2002, DataMirror managed to more than double its stake in Idion from 16.58%," says DataMirror CEO Nigel Stokes. "The current 38.8% holding includes the shares from various individuals and entities from the Vlok family, which is being disputed by the Vlok family and is sub judice. Without this stake, DataMirror`s stake would be 37.8%.
"We managed to get more than twice the shares of the largest shareholder in a company where management and family hold a large percentage of the shares. We said from the beginning that it was not only about control. We wanted to combine the two companies because we see a lot of benefit for shareholders."
Idion CEO Nicolaas Vlok says DataMirror`s announcement is a confirmation that its hostile takeover bid failed after nearly four months of battle.
"As we predicted from the start, DataMirror was unable to get anywhere near the 50% plus one vote it needed for a change of control," Vlok said. "This is a victory for all of Idion`s shareholders who would not be coerced into giving up their stake in a company with high inherent value and an exciting future."
He says it is difficult to see any value for Idion shareholders in a co-operation policy between the companies in the year ahead. "At the beginning of this battle we said that it needs us, possibly desperately, but we do not need it. We have better technology, better management, a superior client list and better prospects. Nothing has changed."
Vlok says DataMirror blocked a number of special resolutions at Idion`s recent annual meeting purely to show that it could, not because the resolutions were not in the interests of shareholders.
"If DataMirror elects to remain a shareholder, it will be treated as a competitor with a minority shareholding. We will not allow a hostile, self-serving competitor to have any influence over the company at the expense of other Idion shareholders."
He reiterates that DataMirror will not be given a seat on the board or access to strategic information about the company.
However, Stokes says that as the largest shareholder, it aims to remain active to ensure proper corporate governance at Idion.
"That is why we raised several concerns at the AGM last week. For Idion to sell off Idion Solutions without talking to their shareholders is not acceptable.
"Last year, according to our calculations and their own numbers, Idion Solutions generated 9.5% of the revenue, the year before it was 11.5%, the year before 100%. It`s the main business that the company listed. It should have been presented to shareholders, there should have been a cautionary as this is a material transaction. This is a total disregard for minority interests.
"But it is clear from CS Holdings that they may not take all the employees. What about the severance packages? There are lots of questions that shareholders legitimately have around it and it should have been presented at a shareholders` meeting."
The Idion share closed 5c or 2.78% down at 175c on the JSE yesterday.
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Battle for Idion: A shareholder`s perspective
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