Datatec soars almost 20% as deal worth about $800m is announced
Datatec’s share price jumped 18% to R63 on Friday morning after it said it was in talks to sell a "major share" of its subsidiary, Westcon-Comstor, for more than $800m.
The computer group said this was the deal referred to in a cautionary announcement on January 25.
Its share price jumped despite Datatec warning shareholders it expected to report its headline earnings per share (HEPS) for the year to end-February more than halved from the prior year’s 19.4 US cents.
"The year-over-year expected decline in earnings is as a result of a worse than expected result in Westcon-Comstor. There was a decline in fourth quarter financial performance in the Europe Middle East and Africa (EMEA) region," Datatec said in Friday’s statement.
"Westcon-Comstor experienced disruption to the business as a result of final stages of SAP implementation in EMEA. Westcon-Comstor has made adjustments to the operating model and Datatec expects this to support a rapid recovery."