ELECTRICAL goods group ARB Holdings has received a R698.6 million buyout offer from privately-held Masimong Group Holdings, acting with investment group Sabvest Finance and Guarantee Corporation.
JSE-listed Sabvest is controlled by the family trust of its chief executive, Chris Seabrooke. The Masimong investment group was founded by its chairperson, Mike Teke. The offer to ARB shareholders by way of a scheme of arrangement would result in its delisting, a statement from the group said yesterday.
Teke is also chairperson of investment company Anchor Group, in which Masimong is a shareholder, which delisted last year. Masimong’s other investments include in Seriti Resources, Masimong Energy, Southern Cross Investments, InteliChem and Rolfe Group.
The offer was pitched at R8 per scheme share, which was a 21.9 percent premium to the 30-day average price of ARB shares traded as at December 2, 2021, the day before the first relevant cautionary was published by ARB.
The share price increased 3.25 percent to R7.70 at midday yesterday. Interestingly, the price shot up nearly 20 percent from R6.51 at the close of trade on December 1 to R7.80 on December 3, effectively narrowing the potential premium for some shareholders.
ARB is an investment holding company for businesses involved in the trading and distribution of electrical, lighting and related products to the contracting, mining, industrial, construction, parastatal, retail and domestic markets across South and southern Africa.
ARB said yesterday it had four decades of successful track record, with an established and trusted reputation in the market. Despite this track record since listing, no new shares had ever been issued and ARB had no foreseeable need to raise capital through the public markets.
In addition, 62 percent of its shares were held by the founding family. As a result ARB’s shares traded with small volumes and minimal liquidity.
Therefore, from the perspective of ARB shareholders, the offer was a rare liquidity event at a premium to the market price, the company said.
Enough ARB shareholders had expressed support for the offer such that the offerer said it was confident the transaction would require the requisite shareholder support at the scheme meeting.
ARB has recently benefited from booming home improvement trends and in the year to end-June 2021 paid out a final dividend at a maximum of its payout policy, and also declared a special dividend.
Revenue increased 24.2 percent to R2.9 billion, while the R211.4m profit was 126.5 percent higher than in 2020 and 45.6 percent higher than in 2019.
BUSINESS REPORT