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 ...
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.