Company comment
Howden’s delisting price shy of market expectations
The bottom line is that Howden’s parent company, Colfax, is buying one of SA’s most reliable industrial assets at a very reasonable price
The delisting pitch price of R44 per share to industrial services company Howden Africa’s minority shareholders is a little shy of the optimistic expectations of about R50-R55 per share. Considering Howden’s superb profit track record and cash pile of R1.3bn (equivalent to R20 per share), the offer might be construed by impartial observers as opportunistic rather than fair. But, in the prevailing dire economic circumstances and considering Howden's recent downbeat trading statement, the offer is likely to find some support. No doubt Howden’s steadfast refusal to pay dividends since 2013 — despite the growing cash pile — has also probably eroded the enthusiasm of a good number of smaller shareholders. For the record, the offer constitutes a 22.63% premium to Howden’s 30-day volume weighted average price (VWAP) of R35.88 a share — which was taken up to September 25 when the company went under cautionary. The offer also amounts to a premium of more than 25% to Howden’s share price on S...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.