Long4Life shares fall af­ter reaf­firm­ing plan to buy Hold­sport

The Star Early Edition - - COMPANIES - Sandile Mchunu

SHARES in Long4Life de­clined 22.31 per­cent yes­ter­day to close at R6.06 af­ter the listed in­vest­ment hold­ing com­pany reaf­firmed its in­ten­tion to ac­quire 100 per­cent of Hold­sport, the listed re­tailer of sport, leisure and recre­ational mer­chan­dise.

Hold­sport has a na­tional net­work of 63 stores that in­cludes Sports­mans Ware­house and Out­door Ware­house.

The group re­ported a 5.8per­cent in­crease in sales to R1.8 bil­lion for the year to the end of Fe­bru­ary.

News of the pro­posed trans­ac­tion first broke about three weeks ago.

Long4Life said yes­ter­day that the of­fer would be im­ple­mented through a scheme of ar­range­ment.

It said share­hold­ers in Hold­sport would have a choice of to re­ceiv­ing 12.10 or­di­nary shares in Long4Life for each Hold­sport share or 11.20 Long4Life shares and R5 in cash for each Hold­sport share, sub­ject to a max­i­mum to­tal cash con­sid­er­a­tion of R204 mil­lion.

The group said the to­tal cash to be paid would not ex­ceed R204m and would be funded by Long4Life from its ex­ist­ing cash re­sources.

Long4Life chief ex­ec­u­tive Brian Joffe said: “This is a piv­otal ac­qui­si­tion for Long4Life and aligns with our stated in­vest­ment cri­te­ria. Hold­sport not only adds sig­nif­i­cantly to the in­trin­sic value of Long4Life, as well as our over­all gear­ing ca­pac­ity, but will prove to be key in es­tab­lish­ing and build­ing the Long4Life in­vest­ment plat­form in the life­style sec­tor.”

Long4Life said the of­fer would en­able share­hold­ers in Hold­sport to re­alise value for their cur­rent share­hold­ing.

It also pro­vided Hold­sport share­hold­ers with the op­por­tu­nity to par­tic­i­pate in a growth op­por­tu­nity.

“This ac­qui­si­tion pro­vides Long4Life with an en­try into the ex­cit­ing sport and out­door mar­kets, which we be­lieve have tremen­dous fu­ture growth po­ten­tial,” Joffe said.

If the deal goes ahead, Hold­sport’s JSE list­ing will be ter­mi­nated and it will be­come a wholly owned sub­sidiary of Long4Life.

The ac­qui­si­tion is sub­ject to a num­ber of ap­provals, in­clud­ing regulatory ap­proval by the JSE, the Takeover Reg­u­la­tion Panel and the com­pe­ti­tion au­thor­i­ties, as well as ap­proval by Hold­sport and Long4Life share­hold­ers.

Long4Life said the trans­ac­tion was ex­pected to be com­pleted in the third quar­ter of this year.

Joffe added the trans­ac­tion would pro­vide Hold­sport with ac­cess to Long4Life’s strong balance sheet, pro­vid­ing ap­petite and ca­pac­ity to grow both ac­quis­i­tively and or­gan­i­cally while also pro­vid­ing the com­pany with ac­cess to its man­age­ment team’s proven deal mak­ing ex­per­tise.

Long4Life, which listed on the JSE in April, is also in dis­cus­sions to ac­quire beauty fran­chisor Sor­bet for about R130m.

Hold­sport shares yes­ter­day gained 1.75 per­cent to close at R66.70 yes­ter­day.

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