Mustek leaps higher on delisting news

Mergers, Acquisitions and Financial Results

PC assembly and technology distribution company Mustek has surprised markets with its decision, announced on Wednesday, to delist from the JSE after 13 years on the local bourse.

However, CEO David Kan tells TechCentral that over the past few years the share price has not reflected the value of the group, hence the decision to buy out minority shareholders.

“The shares are also not very liquid and it just doesn’t make sense for Mustek to stay listed anymore,” he says.

Kan and the Trinitas Private Equity Fund have formally expressed an interest in buying out minorities at R5,55/share, a 30% premium to the share price’s close on Tuesday of R4,25.

Kan says the proposed offer price is what shareholders Sanlam and Old Mutual, which together have 45% of the equity, requested for their support of the deal. The two shareholders have signed an irrevocable acceptance of the offer at R5,55/share.

Kan owns 10% of the group’s issued share capital and would become the majority shareholder by one share if the deal were to go ahead.

The Mustek board is in discussions with Kan and Trinitas and a due diligence exercise will get underway soon.

Kan estimates it costs Mustek between R4m and R5m a year, including all announcements and audits, to remain listed on the JSE.

Delisting by local technology companies appears to be becoming the order of the day. Mustek’s plans come hot on the heels of TeleMasters’ announcement that it will delist. And Vox Telecom is believed to have similar plans.