A second consortium is contemplating making a counterbid for JSE-listed Softline, with an offer 15c a share higher than the management consortium's offer currently on the table.
Pastel Software founder Ivan Ferrer and Dutch-listed Exact Holding have sent Softline chairman Marcel Golding a letter saying they are contemplating making an offer to Softline shareholders to buy their shares for about 145c a share.
The Ferrer consortium has not yet tabled a formal offer, saying this is subject to a review of information it has requested from the company.
Softline investor relations director Lara Jawitz has declined to comment on the matter, saying only that the company will make a statement later.
The Softline share surged on the news, climbing 15c to 143c by late this morning.
Several institutional shareholders have already taken a dim view of the 130c offer by the Softline management consortium, saying it is too low.
KPMG Services, the independent advisor to Softline minority shareholders, says the management proposal to delist and offer shareholders an advance liquidation dividend of 130c a share is reasonable, but may not be fair to long-term investors.
It says the offer price "does not reflect the fundamental value of Softline" based on KPMG's independent valuation.
Anthony Sedgewick, investment manager at African Harvest, which owns about 7% of Softline, says the higher price tag "is a vindication of our perspective that 130c does not represent the value of the company".
No surprise
"It comes as no surprise that somebody else who has an intimate knowledge of the company recognises that its value is more than 130c," he says.
He says while Softline argues that its offer represents a premium to its NAV, the company disclosed in its interim results that it had written down its investment in US-based SVI.
"In the meantime, the SVI share has quietly climbed to $2.40, which values Softline's stake, at this morning's prices, at R128 million."
The Ferrer consortium says if it receives the requested information promptly, it expects the review to take no longer than two weeks.
"It is thus anticipated that the consortium will make an offer, should its review of information prove satisfactory, that will be announced to shareholders prior to the general meeting relating to the management offer as indicated in Softline's announcement of 30 May 2003."
Softline has scheduled the general meeting for 21 July.
The Ferrer consortium says that if any information arising from the review suggest that an offer should be structured otherwise, it "reserves the right to make an offer on a basis similar to that of the management offer, where the consortium would acquire the entire undertaking of Softline for a consideration such that shareholders will receive a net distribution of approximately 145c per share".
Exact Holdings, founded in 1984, manufactures software for accounting, human resources management, customer relationship management, e-business and enterprise resource planning.
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