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Picture: 123RF/SPAINTERVFX
Picture: 123RF/SPAINTERVFX

TeleMasters’ two largest shareholders have been approached to acquire their shares in the technology group, subject to a number of conditions. 

The group operates in the telecom sector and specialises in custom telecom solutions for businesses. The primary segments it serves are voice service providers, cloud PBX service providers and internet service providers.    

In a cautionary note to investors on Friday, the group said if a formal offer was made and accepted, it would result in a change of control of TeleMasters and a mandatory offer being made to the remaining shareholders in the company on the same terms.

Local takeover rules stipulate that if any party buys more than 35% of a company’s shares, it triggers a mandatory offer to all the other shareholders. Part of the rationale for this is to protect minority shareholders from the whims of large investors. Special resolutions usually require a two-thirds vote to be passed. Therefore, when a particular investor reaches 35% of ownership, it can effectively block such resolutions unilaterally. 

“Discussions are ongoing and certain regulatory matters have to be concluded by the acquirer before a formal offer can be made,” TeleMasters said. However, “the interested party has to engage with advisers and funders and thus maintenance of confidentiality of information cannot be controlled by TeleMasters”.

On the same day, the company said it was also “in the early stages” of issuing an expression of interest for an acquisition, “which would be substantial to TeleMasters and, if concluded, would require shareholder and regulatory approvals”.

This comes a few days after Miller Moela was appointed to the board of TeleMasters as an independent nonexecutive director, effective from July 1.

In March, the company announced that it would dispose of 30% of its subsidiary CatalyticConnections to the Sebenza Education and Empowerment Trust. 

TeleMasters was founded in 2001 and listed on the JSE in March 2007.

A little traded stock, TeleMasters shares were unchanged at R1.10 on Friday. The share is up 37.5% so far in 2024. 

gavazam@businesslive.co.za

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