Bell Equipment shares fall after IA Bell sets takeover plan in motion
If scheme is approved IA Bell will acquire an additional 29.45% stake in the company and delist it from the JSE
Shares in Bell Equipment fell on Friday after the earth-moving equipment group laid out plans for a buyout by IA Bell.
In March, IA Bell, the family trust controlling the company, made a non-binding expression of interest to buy the shares it does not own at R10 a share, well below its current share price of just less than R13.
IA Bell controls the personal wealth of the founding Bell family. The company was started in 1954 by Irvine Bell, father of Gary Bell, a director of IA Bell.
Bell Equipment said the deal will be implemented via a scheme of arrangement to be proposed by the board between it and eligible shareholders.
The market reacted negatively to the news, sending the stock down 13.23% to close the week at R12.97, its lowest in just less than a month. The share has more than doubled in the year to date.
If the scheme is approved, IA Bell, which already owns 70.1% of the shares in Bell Equipment after buying up a 31.41% stake from US company John Deere, will acquire an additional 29.45% stake in the company and delist it from the JSE.
IA Bell believes that the company will be able to operate “more sustainably in the delisted environment”.
“During a time of immense uncertainty in world markets, IA Bell believes that agility around the company’s strategy execution and emphasis on the founding family values within the organisation will assist in achieving acceptable and sustainable financial returns over the next four to six years,” it said.
IA Bell said it will be able to take a longer-term view in its approach to managing Bell Equipment’s business “particularly where certain strategic decisions are necessary which are unlikely to yield positive short term financial results”.
“These time parameters do not suit the listed environment,” it said.
Minority investors have previously slammed the independent board appointed by Bell Equipment to oversee the takeover, saying it had done nothing to protect them from a predatory bid.
Shareholders including Shipyard Capital Management and Opportune Investments have previously stated they believe Bell Equipment could be worth R40-R60 a share, citing Bell Equipment chair Gary Bell who at the previous year’s annual general meeting said that he believed the company could be worth R36 a share or more, which is its net asset value.