In one of the most surprising takeover bids this year, printing and packaging company Novus Holdings has bought up 35% of listed Mustek shares and has offered to buy the rest of the technology distribution company, even though some of Mustek’s key shareholders have rejected the bid.
Novus said in a JSE regulatory notice on Friday that it and its related parties had already acquired a 35% stake in Mustek’s issued shares - the offer valued Mustek at about R750 million.
As a result of reaching the 35% threshold, Novus was now required, in terms of takeover regulations, to make a mandatory offer for the rest of the Mustek shares.
Novus is offering R13 cash for each Mustek share, or R7 cash per Mustek share and one Novus share per Mustek share, or two Novus shares per Mustek share. Mustek’s market capitalisation on Friday afternoon was R786.57m.
Computer and technology distribution company Mustek’s share price reacted by jumping 8.12% on Friday to reach R14.78. Novus’ share price was, however, down 2.8% on Friday afternoon at R7.63.
The closing price of a Novus share on Thursday was R7.85, which puts the value of a Mustek shareholder taking the Novus two-share offer at R15.79, which is 20% above the R13 per share cash offer.
The transaction is still subject to Competition Commission approval, even though the two companies operate in entirely different markets.
Meanwhile, three of Mustek’s shareholders, the DK Trust, the group MD Cornelius Coetzee, and group CEO Hein Engelbrecht, who together control about 11.67 million Mustek shares, or 20.29% of the issued shares, have indicated they would reject the bid and would not sell any of their Mustek shares.
Novus has put up a R335m guarantee for the mandatory offer. Novus and its related parties hold 20.18 million Mustek shares, about 35.07% of the issued share capital.
Earlier this month, Novus said it had completed its about R43m acquisition of three Media24 divisions: a distributions business, On the Dot; its community newspaper portfolio; as well as football-focused Soccer Laduma and Kick Off.
Mustek will represent Novus’ second acquisition this year into technology. In May it acquired Bytefuse, which specialises in creating AI solutions through rapid prototyping, leveraging unique data and context available to each enterprise.
Mustek has faced tough trading conditions recently, which has impacted its profitability.
In September, Mustek said it would cut its dividend by 90% to 7.5 cents per share after reporting an 82% slump in headline earnings per share for the year to June 30, 2024. This followed a 16% decline in revenue to R8.5 billion as sales of renewable energy solutions declined sharply, after the suspension of load shedding from March.
During the year, Mustek’s two largest businesses, Mustek Operations and Rectron, reported 12% and 24% declines in their revenues, respectively. The group intended to consolidate and streamline operations in the new financial year, as well as dispose of non-core assets.