Counterbid lights Prism share

By Iain Scott, ITWeb group consulting editor

Johannesburg, 27 Feb 2006

A counteroffer for Prism has ignited the group`s share.

Allied Technologies (Altech) announced just before the market closed on Friday that it had submitted to Prism`s board a notice of its firm intention to make an offer to buy Prism for R1.16 a share.

The offer, which amounts to R686.94 million, is 14% higher than the recent offer proposed by Net1, a subsidiary of Net1 UEPS Technologies, which is listed on the Nasdaq but headquartered in SA.

Net1 submitted a letter to Prism on 8 February, expressing its firm intention to make an offer at R1.02 a share, amounting to R604.03 million.

That offer was already 28% up on Prism`s market capitalisation at the time.

Prism`s share, which closed 9c or 9.4% up at 96c on the JSE on Friday, was trading 8.6% higher at 114c by midmorning today - a new 12-month high well off its 12-month low of 38c.

By 10.30am, almost 5.7 million shares had been traded in 51 deals.

Altech`s share was trading at 5 250c, up 50c or just under 1% up on Friday`s close.

Shareholders - including some directors and staff - owning 43% of Prism had entered into irrevocable undertakings to accept the Net1 offer.

However, Altech says it understands that those undertakings are released in the event of another party offering a premium of at least 10% on the Net1 price.

Prism`s agreement with Net1 stipulates that if the Prism/Net1 deal fails due to a competing bid being accepted by Prism shareholders, Prism will pay Net1 a break fee of R6 million.

Altech CEO Craig Venter says that with the convergence of products and services in the technology, media and telecommunications sector, Prism`s technologies will complement those of Altech.

"We have a high regard for the skills and competencies of the Prism people and we feel that they will have a promising future with Altech," he adds.

Altech says it will add strength to the international market development of Prism`s specialised secure transaction technologies and chip/smart-card products.

"These have wide application in e-commerce transactions in the telecoms, banking and retail sectors," it says.

The Net1 UEPS Technologies share closed at $32.78 on the Nasdaq on Friday, up $1.19 or 3.8%.