Afrimat offers to buy out Infrasors

AFRIMAT is to make a cash offer to acquire the entire remaining shareholding in listed building material firm Infrasors that it does not already own.

The listed open-pit mining and materials group owns 91.28 percent of the total issued ordinary shares of Infrasors, which in the year to February contributed R23 million to Afrimat’s total operating profit of R280m.

The planned acquisition will be through a scheme of arrangement or a general offer if the scheme of arrangement does not proceed.

In terms of the scheme, Afrimat will pay the remaining shareholders in Infrasors R1.35 a share in cash for their Infrasors shares.

The offer price represents a 19.47 percent premium to the 30-day volume weighted average traded price calculated at the close of trade on Tuesday.

Andries van Heerden, the chief executive of Afrimat, confirmed last month that the group had increased its shareholding in Infrasors to almost 92 percent and was planning to make an offer soon to buy out the remaining minority shareholders.

Van Heerden said Infrasors would be delisted from the JSE if the buyout offer was accepted.

In a joint statement issued yesterday, Infrasors advised its shareholders that its board had undertaken to co-operate with Afrimat in the implementation of the transaction and to propose the scheme.

Commenting on the rationale for the transaction, Afrimat said it believed it would be beneficial because the incorporation of Infrasors’ operations into Afrimat, without the limitation of maintaining separate corporate governance structures due to Infrasors having minority shareholders, could potentially bring new business and rationalisation opportunities.

Beneficial

Infrasors said it believed the transaction would be beneficial because the incorporation of Infrasors’ operations into Afrimat could result in developing new revenue opportunities and cost reductions, which would deliver increased profitability.

The transaction is classified as an affected transaction in terms of the Companies Act and Infrasors has therefore convened an independent board to consider the terms of the transaction and the report that would be received by the independent expert.

The independent board is represented by Mochele Noge, Percy Ford Chuang Ying and Jacobus Coenrad Petrus Bekker.

Infrasors is also in the process of appointing an independent expert, for the purposes of providing a fairness opinion on the terms of the transaction.

The opinion of the independent expert and the opinion and recommendation of the independent board will be included in the circular to be distributed to Infrasors shareholders by no later than July 10.

Hendrik Verreynne, Afrimat’s financial director, told Business Report last month that the remaining minority shareholders in Infrasors included “one big block owned by a private individual” and Afrimat had to determine a price that would be palatable for the minority shareholders.

Shares in Infrasors rose 8 percent yesterday to R1.35, which valued the company at R220m, while shares in Afrimat climbed 2.64 percent to R19.45, valuing it at R2.8 billion.