Buildmax bid offer deemed unfair
Buyout price appears to discount firm’s recent strong turnaround
BDO Corporate Finance, the independent experts contracted to assess the buyout offer for mining services firm Buildmax, determined a higher valuation for the company, deeming the bid unfair but reasonable. BDO determined a valuation range of 24c per share to 33c per share for Buildmax and in the scheme circular it sent out this week, it said a "most likely" valuation for Buildmax was 28c per share. The buyout offer is pitched at 15c. But BDO did point out that Buildmax held net debt of R200m as at the end of February — reflecting a debt to equity ratio of four times. This gearing, according to BDO, introduces financial risk and may limit the ability of the business to borrow further. The "low-ball" offer of about R27m for Buildmax, which close to four years ago was holding a market capitalisation of around R560m, was pitched last week by a new special purpose vehicle consisting of members of Buildmax’s management team and black economic empowerment participants. Central figures are ...
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