Trans Hex advised to reject Wiese offer

THE independent board of diamond miner Trans Hex has advised shareholders not to accept the offer from billionaire Christo Wiese, pointing out that experts had placed a “fair and reasonable value” of R8 per share for the company, more than double the bid on the table.

In August, two firms associated with retailer Wiese, Cream Magenta and Metcap, bought 47.08% of Trans Hex, an alluvial diamond miner, and, together with investment company RECM and Calibre Investments, which owns 25.2% of Trans Hex, launched a mandatory offer for the whole of the alluvial diamond miner for R3.94 a share.

However, on Friday, Trans Hex notified shareholders that its independent board had advised against accepting the offer after Snowdon, appointed as independent experts, had put a range of values on the company, starting between R3.45 a share and topping out at R12.87 a share, and that the fair and reasonable value was R8 a share.

“The independent board, having taken into account the opinion of the independent expert regarding the offer, is of the opinion that the terms of the offer are not fair and not reasonable to shareholders and, accordingly, recommends that shareholders do not accept the offer,” Trans Hex said.

Piet Viljoen, chairman of RECM and Calibre, the spokesman for the takeover group, was not available for comment.

The offer closes at midday on November 25 and the results will be published on November 28.

Trans Hex told shareholders in August if Wiese’s family-owned company and RECM and Calibre, which collectively own 72.28% of the company, secured 75% or more of the shares in issue, it would ask shareholders to approve a delisting from the Johannesburg bourse.

Trans Hex has three operational areas. These are the lower Orange River Mines, which include the Baken and Bloeddrif mines that are slated to close in 2018 and 2019, respectively, and a stake in West Coast Resources, a venture that bought the Namaqualand diamond mine from De Beers. Trans Hex is also the manager of the Somiluana mine in Angola.

The 181-page Snowdon report said that of the R1.5bn Trans Hex was expected to spend on capital over the life of these operations, Somiluana would absorb R1.225bn, while the Namaqualand operations would need R180m.

On Friday, Trans Hex shares closed 1.3% higher on thin volumes in just six trades, closing the session at R3.80.

The board felt the offers terms were not fair or reasonable to shareholders