Major shareholder wants to buy Jasco and delist group
Technology company Jasco Electronics plans to delist from the JSE. It has entered into talks with a major shareholder looking to buy the entire group.
If successful, the company will join a growing list of technology businesses that have delisted or moved their primary listing from the local exchange.
Jasco interests include providing transmission and operational support systems for Southern African telecoms networks,
The company said on Monday that it had begun talks with major shareholder Community Investment Holdings (CIH) about its intention to make a general offer to Jasco shareholders and “to consequently terminate the listing of the company’s ordinary shares on the JSE”.
CIH will offer to purchase all issued Jasco ordinary shares for a consideration of 16c each, valuing it at about R58.8m.
The offer represents a 4% premium on the 30-day weighted average traded price of Jasco shares on December 2, which was the last trading day preceding the announcement of the proposed deal.
On Monday, Jasco shares — down 63% so far in 2022 — stood unchanged at 14c.
The offer is set to become conditional on Jasco shareholders passing a resolution to approve the delisting at a general meeting of Jasco shareholders to be convened in due course, subject to the required regulatory approvals being obtained. Jasco has been slimming down operations in recent years.
In 2021, the company sold its property technology management division for R7.5m to Reach Group, saying the business had become stale and had not reached its full potential.
Most recently, the group put its security and fire business into voluntary liquidation after misconduct by its management was discovered and investigated.
Jasco’s exit from the JSE is part of a larger trend in the local stock market. The exchange is facing a delisting crisis, with 25 companies having left it in 2021, 20 in 2020 and 24 in 2019.
Many small firms like Jasco and Etion struggle to attract investment on the exchange. Compounding the problem is a global technology downturn in which even the likes of Apple, the world’s largest tech firm, has lost more than a quarter of its value so far in 2022.