Allied Electronics Corp (Altron) says it has made an offer through its wholly-owned
subsidiary, Altron Finance Proprietary Limited, to acquire the entire issued ordinary
share capital of Allied Technologies (Altech).
The move has been widely expected by the market following a poor run of results from Altech.
Altron will pay R47.50 in cash for every Altech Share. It already owns a 62% stake in Altech.
Shares in Altech jumped 27.94%, or R9.61, to R44 on the news, while Altron declined 2.15%, or 44 cents, to R20.06 on the JSE. The All Share Index was off a fraction to 41,379.
Following implementation of the scheme, application will be made to the JSE to terminate
the listing of Altech Shares on the JSE.
The aim of the transaction is to create a single listed point of entry into the Altron Group, simplify the corporate and operating structure of the Altron Group; and enable the maximisation of synergies within the Altron Group, both parties said in an statement on Friday (17 May).
On 8 May 2013, Altron announced a 6% rise in revenue to R25 billion for the year ended February 2013, however, the group trimmed its dividend pay-out largely due to losses incurred by its subsidiary, Altech.
Earnings before interest, tax, depreciation and amortisation (ebitda) decreased 19% to R1.6 billion against the comparative year in 2012, and headline earnings per share decreased by 29% to 136 cents.
Altron declared a gross ordinary dividend of 60 cents per ordinary share, from 92 cents in 2012.
Late last month (24 April), Altech reported a diluted basic loss per share from total operations of 920 cents for year ended February 2013, from a prior loss of 275 cents before.
Revenue from continuing operations improved 4.7% to R10.16 billion, from R9.58 billion before, while results from continuing operating activities grew to R626 million, from R476 million in 2012.
However, from discontinued operations following the disposal of its Telecommunication Network interests in East Africa, Altech pointed to a R1.54 billion loss from its operating activities, compared to a prior loss of R657 million.
It recorded an overall loss for the year from discontinued operations of R1.636 billion.
Altech decided not to declare a dividend in respect of the current financial year to conserve cash resources.