| Tue 3 Jun 2003, 15:29 | | Mettle's offer to buy DNA stake falls through |
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June 3, 2003
By Ronnie Morris
Cape Town - An offer of R160 million from Mettle, through its subsidiary Sage Wise, to buy a controlling stake in DNA Supply Chain Investments fell through yesterday, DNA said.
DNA said that on the face of it the offer for the supply chain management company was not capable of being implemented. The board would, however, consider the offer as soon as possible.
Meanwhile it would continue negotiations with Super Group, which has made a loan of about R22.5 million available to DNA.
Super Group, listed in the transport, rail, road and freight sector, has previously offered to purchase DNA's core business operations, including Micor, Automotive, Sherwood, Streamworks and Jumpoint.
But Andre van der Veen, the equity executive with Mettle, said yesterday afternoon that talks were ongoing and things were moving rapidly. The company hoped to make another announcement to shareholders soon.
Mettle's offer of R160 million was conditional on DNA shareholders accepting it. This would have seen Sage Wise make available an immediate loan of R25 million, a repurchase offer to DNA shareholders of 18c a share, repayment of about R60 million of DNA's current bank debts, the delisting of DNA from the JSE Securities Exchange and the subscription by Sage Wise of 51 percent of the DNA shares.
In a press advertisement yesterday, Sage Wise said it appeared from previous announcements that should DNA shareholders accept Super Group's offer, DNA shareholders would be precluded from choosing whether to sell their DNA shares at a given value or remaining as shareholders in an unlisted DNA
.
The Sage Wise offer, on the other hand, gives DNA shareholders the flexibility to accept 18c a share or to remain invested in DNA, with the potential of realising additional value in the future.
The offer of 18c a share was a substantial premium over the tangible net asset value of 8.1c a share, based on the published unaudited results of DNA for the six months to December 2002.
In terms of the loan offer, DNA must make an offer to shareholders to buy their shares at 18c a share, repay Super Group's loan, pay Sage Wise between R2 million and R3.2 million for the transaction costs of the loan and use the remainder to repay its bank loans.
Van der Veen said Mettle was trying to clarify with DNA's independent advisers that the offer was not capable of implementation and would address specific issues if needed.
Asked why Mettle was so keen to buy DNA, Van der Veen said it offered good growth potential and Mettle believed that it had the expertise to assist those businesses in funding their future growth.
There should be more developments today, he said.
Asked if it meant that talks would carry on through the night, Van der Veen coyly said: "We're in discussions the whole time. These things tend to move quickly and it's an ongoing discussion in process with the board, especially with the independent advisers, who we've been working with and who have been helpful."
DNA shares closed unchanged at 13c yesterday.
