End of the road for VenFin

By Iain Scott, ITWeb group consulting editor

Johannesburg, 15 Feb 2006

UK cellular network operator Vodafone has confirmed its intention to invoke the section of the Companies Act that makes it compulsory for VenFin shareholders to sell it their shares.

Section 440K of the Act stipulates that if shareholders owning more than 90% of the shares in a company accept an offer to buy their shares, the party making the offer may make it compulsory for the remaining shareholders to accept the offer too.

Vodafone announced last night that it had now gained a 94.5% economic interest in VenFin and a voting interest of 96.8%.

It added that it would send a circular to shareholders who had not accepted the offer, incorporating a notice in terms of section 440K and a further form of surrender and transfer.

The VenFin share is to be suspended the day after the notice is posted and delisted the first Monday after which Vodafone is entitled and bound to acquire the remaining shares in terms of the Act.

History

VenFin`s origins date to the 1940s with the establishment by Anton Rupert of a tobacco company called Voorbrand, later to become Rembrandt, which was listed on the JSE in 1956.

From the 1970s, Rembrandt expanded beyond the tobacco sector, acquiring companies in various other industries, including financial services, telecoms and engineering.

In 2000, the group restructured, with four listed companies being folded into two. Rembrandt`s traditional tobacco, financial services, mining and industry interests were placed into Remgro, which was listed separately on the JSE.

The telecoms and technology interests remained in VenFin, which continued to invest in other sectors.

Vodafone launched its bid for VenFin late last year, with the aim of acquiring VenFin`s 15% stake in local cellular network company Vodacom. This would bring Vodafone`s stake in Vodacom to 50%, equal to Telkom`s shareholding in the company.

At the beginning of this month, once Vodafone gained two-thirds of VenFin, all of the company`s assets, except its Vodacom stake, were sold to a newly incorporated company, Newco, for R5 billion.