MARC HASENFUSS: From Dawn to dusk
The bottom line is that Dawn is not generating enough cash flow to cover operating expenses, capital expenditure and working capital requirements
After a dismal 2018, I would have preferred to kick off the year on an optimistic note. Yet I cannot deny my morbid curiosity about developments at building supplies conglomerate Distribution & Warehousing Network (Dawn) over the past six weeks. Initially, I thought the 1c a share (or R5.8m) buyout offer from Polanofield — a company involving former Dawn CEO Derek Tod — was a highly opportunistic pitch, and one that could spur other bidders with higher offers. In fact, I snapped up a few shares at 2c. Officially Polanofield’s offer was pitched at an 80% discount to the 5c a share 30-day volume weighted average price of a Dawn share prior to the release of a cautionary notice. Polanofield’s offer also heavily discounted Dawn’s last stated tangible NAV of around 90c a share given in the year to end-March results. Understandably, more than a few market watchers were keen to read the independent expert’s "fair and reasonable" pronouncement on the Polanofield offer. Even though the recen...
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