Caxton muzzled from making public announcements about Mpact merger

The corporate banter between Caxton and Mpact took a new turn on Thursday after the takeover special committee (TSC) barred the former from making public announcements about the acquisition of the latter without the approval of regulators.

The special committee is the appeal body of the takeover regulation panel (TRP). Caxton was appealing an earlier decision which gagged it from talking to the market about a merger.

“Caxton, being a potential offeror — as that term is used in the Takeover Provisions — during the pre-firm offer period, had no right to breach the strict confidence rules relating to the disclosures of price-sensitive information regarding the approach to acquire control in Mpact,” a ruling by the TSC reads.

“Caxton is prohibited from making any further public statements or announcements in any form and on any platform about the acquisition of Mpact without the approval of the panel [TRP].”

Caxton, a printing and publishing group, has had its sights on Mpact for years as it built a 34% stake, but negotiations over a full takeover have failed, leading to a legal battle.

In essence, the publisher of The Citizen and Farmers Weekly is trying to take over the company without making the mandatory offer to Mpact’s minorities, which would be triggered if it took its stake to 35%. It is doing so by trying to get competition regulators to allow it to file the deal as a merger.

As part of the mudslinging between the two companies, Mpact in 2022 dispelled a number of claims made by Caxton on the nature of proceedings between the two companies.

Mpact denied Caxton’s allegation that it is soliciting support from shareholder Golden Era to oppose the merger and that it filed “secret representations” and affidavits with SA’s competition authorities.

It has also been alleged that Mpact would lose Golden Era as a customer since it competes with Caxton. “The board could not conclude, in the circumstances, that Mpact is likely to lose Golden Era as a customer,” it said.

Mpact, which was spun out of Mondi and listed on the JSE in 2011 and is valued at about R4bn, has previously denied claims by Caxton that the board has been hostile to a proposed merger and failed to disclose material information to shareholders. It accuses Caxton of lacking transparency.

Caxton has been restructuring its business in the face of falling newspaper and magazine sales, but has returned to profitability after cutting costs.