Marc Hasenfuss Editor-at-large

Building supplies group Distribution and Warehousing Network (Dawn), a former market darling which, just 18 months ago, was able to raise R358m in a rights issue, could be snatched up in an outrageous low-ball offer of R6m. The buyout offer pitched at 1c a share shocked most market observers on Tuesday — notwithstanding the brittle trading conditions prevalent in the building and construction industry. At the end of March this year Dawn stated its tangible net asset value at more than 50c a share. “The value destruction for shareholders has been far worse than Steinhoff International [which is widely regarded as the major blowout on the JSE in recent years],” said Opportune Investments CEO Chris Logan. Logan, whose company used to own Dawn shares but has since sold out, said the rock-bottom buyout price pitched for Dawn needed to be contextualised by the fact that the company held two rights issues — one in 2009 to raise R720m at 720c a share and another in 2017 for R358m at 100c a ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now