Jasco receives firm intention for takeover and delisting
Main shareholder Community Investment Holdings will offer to purchase all the issued stock
06 March 2023 - 17:46
by Mudiwa Gavaza
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Technology company Jasco Electronics is a tep closer to delisting from the JSE with a big shareholder looking to buy the entire group issuing a firm intention to do so in line with local regulations.
On Monday Jasco,whose interests include providing transmission and operational support systems for telecom networks across Southern Africa, said main shareholder Community Investment Holdings (CIH) will offer to purchase all of the issued stock in the technology group at 16c per share.
As per local takeover regulations the company has appointed an independent board to evaluate the offer. That board has in turn engaged BDO Corporate Finance as the independent expert as required by the Companies Act to assess whether the terms and conditions of the offer and delisting are fair and reasonable to shareholders.
The group — now worth R47.77m — says it has not received other offers.
Jasco’s impending exit from the JSE is part of a larger trend in the local stock market. The exchange is facing a delisting crisis, with 25 companies having left it in 2021, 20 in 2020 and 24 in 2019. There are now 292 listed companies on the exchange, down from 324 at the end of 2021.
Many small firms have struggled to attract investment on the exchange. Compounding the matter is a global technology downturn in which Apple, the world’s largest tech firm, has lost more than a quarter of its value in 2022.
In technology, Jasco joins the likes of Adapt IT, which left the JSE in 2022, Alaris in 2022, Etion in February and Alviva set to do so in the coming week.
In December Jasco said it had begun talks with CIH about its intention to make a general offer to Jasco shareholders and “to consequently terminate the listing of the company’s ordinary shares on the JSE”.
CIH will offer to purchase all issued Jasco ordinary shares for 16c each, valuing it at about R58.8m. The offer represents a 4% premium to the 30-day weighted average traded price of Jasco shares on December 2, which was the last trading day before the announcement was made.
CIH and its associated entities hold 55.36% of Jasco shares.
The group recently reported revenue of R276.1m in the six months to end-December 2022, a 14% decrease due to lower demand for specialised communications cable in its Communication Solutions unit and the loss of customer orders in manufacturing after a protracted strike during the 2022 financial year.
Profit before interest and taxation or operating profit fell 173% from R14.5m to a loss of R10.7m mainly due to the drop in sales volumes and related margins.
A little traded stock, Jasco shares — down 13.3% so far in 2023 — remained unchanged at 13c.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Jasco receives firm intention for takeover and delisting
Main shareholder Community Investment Holdings will offer to purchase all the issued stock
Technology company Jasco Electronics is a tep closer to delisting from the JSE with a big shareholder looking to buy the entire group issuing a firm intention to do so in line with local regulations.
On Monday Jasco, whose interests include providing transmission and operational support systems for telecom networks across Southern Africa, said main shareholder Community Investment Holdings (CIH) will offer to purchase all of the issued stock in the technology group at 16c per share.
As per local takeover regulations the company has appointed an independent board to evaluate the offer. That board has in turn engaged BDO Corporate Finance as the independent expert as required by the Companies Act to assess whether the terms and conditions of the offer and delisting are fair and reasonable to shareholders.
The group — now worth R47.77m — says it has not received other offers.
Jasco’s impending exit from the JSE is part of a larger trend in the local stock market. The exchange is facing a delisting crisis, with 25 companies having left it in 2021, 20 in 2020 and 24 in 2019. There are now 292 listed companies on the exchange, down from 324 at the end of 2021.
Many small firms have struggled to attract investment on the exchange. Compounding the matter is a global technology downturn in which Apple, the world’s largest tech firm, has lost more than a quarter of its value in 2022.
In technology, Jasco joins the likes of Adapt IT, which left the JSE in 2022, Alaris in 2022, Etion in February and Alviva set to do so in the coming week.
In December Jasco said it had begun talks with CIH about its intention to make a general offer to Jasco shareholders and “to consequently terminate the listing of the company’s ordinary shares on the JSE”.
CIH will offer to purchase all issued Jasco ordinary shares for 16c each, valuing it at about R58.8m. The offer represents a 4% premium to the 30-day weighted average traded price of Jasco shares on December 2, which was the last trading day before the announcement was made.
CIH and its associated entities hold 55.36% of Jasco shares.
The group recently reported revenue of R276.1m in the six months to end-December 2022, a 14% decrease due to lower demand for specialised communications cable in its Communication Solutions unit and the loss of customer orders in manufacturing after a protracted strike during the 2022 financial year.
Profit before interest and taxation or operating profit fell 173% from R14.5m to a loss of R10.7m mainly due to the drop in sales volumes and related margins.
A little traded stock, Jasco shares — down 13.3% so far in 2023 — remained unchanged at 13c.
gavazam@businesslive.co.za
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