Dawn’s stock rockets as it reaches deal to sell Grohe Dawn Watertech stake
Distribution and Warehousing Network’s (Dawn’s) share price rocketed more than 20% on Thursday, after the company said it had concluded a deal to sell its minority shareholding in Grohe Dawn Watertech (GDW).
The Lixil corporation, which holds 51% of GDW, is to buy Dawn's 49% stake, firming up a nonbinding agreement struck in July.
Under the proposed agreement, GDW would repay Dawn’s shareholder loan claim against the company, which would see it receive an aggregate R324.5m.
Financial Mail reported in late July that speculation about a price for the deal put it at R250m.
GDW is an investment holding company of the Watertech Companies engaged in the manufacture and supply of taps, mixers, sanitary ware and related plumbing accessories.
Dawn said the rationale for the transaction was that the allocation of the proceeds would be better utilised in Dawn’s core South African operations.
As Dawn’s March 2017 audited consolidated financial statements, the investment in GDW had a carrying amount of R290.6m and contributed a loss, including impairments of R65.7m, the company said.
At 10.25am Dawn's share price had risen 21.05% to R1.15.