Swedish group Saab, through subsidiary Saab SA, has submitted a letter to the Grintek board stating its firm intention to make an offer to buy the group at 190c a share.
The group will offer to buy all the shares it does not own, with the exception of the stake owned by Kunene Finance Company and Kunene Technology Investments.
The offer is higher than the 170c it initially indicated that it would offer for the shares when it said it was considering an offer last November.
It also represents a premium of 52c or 38% to the closing price of 138c on 8 November, which was the day before a related detailed cautionary announcement was published.
Since then the share has risen substantially, closing at 187c on the JSE yesterday.
Grintek already owns 14.3% of Grintek. If the deal is implemented, it will hold 70.3% while Kunene will own 29.7%. At 190c a share, the 56% stake targeted in the offer is worth R316 million.
Grintek says one of the reasons for the offer is Saab`s wish to extend its geographical presence to Africa.
It adds that the defence and aviation arenas require significant capital expenditure as well as research and development expenditure.
"As a controlling shareholder of Grintek, Saab will be able to forge a closer working relationship with Grintek, facilitate the transfer of technical expertise, undertake joint development and marketing initiatives, provide Grintek with greater access to world markets and an opportunity to leverage off of Saab`s international infrastructure," it says.
Grintek says its directors and an independent sub-committee appointed to review the deal are supporting it. Independent third-party Investec Bank has said the offer is fair and reasonable provided the time frame, which sees the deal completed by around 25 April, is adhered to.
The Grintek share was up by 2c or 1.07% at 189c in early trade this morning.
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