Derek Tod. Picture: SUNDAY TIMES
Derek Tod. Picture: SUNDAY TIMES

Building supplies group Distribution and Warehousing Network (Dawn) moved one significant step closer to ending its chequered career as a listed entity on Monday when 83% of shareholders voted to accept the 1c a share offer from Polanofield. Only 68% of the shareholders attended the meeting.

In a statement released on Monday afternoon the company said the buyout scheme remains subject to the fulfilment or waiver of the remaining conditions. The only remaining condition appears to be approval from the Takeover Regulation Panel. The share is due to be delisted on February 18.

Dawn chair Theunis de Bruyn told Business Day on Monday that he did not know of any shareholders who had notified the company of their intention to pursue their appraisal rights. Such appraisal rights are always available to dissenting shareholders who are unhappy with the terms of a significant restructuring.

A shareholder intending to exercise appraisal rights had to provide Dawn with written notice before the shareholders’ meeting on Monday.

Chris Logan of Opportune Investments, which was previously invested in Dawn, said shareholders were unlikely to go the appraisal route because the offer was so low.

Logan said pursuing appraisal rights was a costly and time-consuming exercise and that the independent expert opinion issued by BDO at the time of the offer indicated Dawn shares might have zero value. BDO said the 1c offer was fair and reasonable to shareholders.

The rapid demise of the company came as a shock to shareholders who had backed a R350m rights issue pitched at 100c in early 2017. However, despite the injection of funds and the sale of a major asset, the company struggled to generate profits. In early December 2018 the Dawn share price plummeted from 8c to an all-time low of 1c when the company announced it had received the 1c a share offer from Polanfield, a company involving former Dawn CEO Derek Tod.

Tod founded Dawn and listed it in the late 1990s. He then embarked on a major acquisition spree but retired in 2015 after disappointing results knocked the share price from R12.97 to just above R6 within a few months. The 1c offer values the company at R5.8m.