LOCALLY listed software company FrontRange has completed its efforts to take full control of its USbased subsidiary by taking out the 4,8% held by various minority shareholders for $1,1m.
FrontRange Limited now holds 100% of FrontRange Solutions, its only operating arm. The buy-back was funded from its cash reserves.
The move completes the takeover strategy which in April saw FrontRange buy back 11% of the subsidiary that was held by Peregrine Systems.
FrontRange paid Peregrine 1,6m for those shares. The difference in that purchase price and the higher price-per-share it has just paid is attributable to the bankruptcy Peregrine is facing. Peregrine's creditors were happy to take what they could for the shares it held in FrontRange.
That move meant FrontRange held more than 90% in the US company, allowing it to make a mandatory offer to the remaining 31 minority shareholders.
The offer price was based on the 105c closing price for FrontRange on April 10, the day on which the offer was formulated, and subject to the prevailing exchange rate. After the offer price was fixed FrontRange shares became hyperactive, first rising to 115c then spiralling up by 40% to a high of 160c within a week. They have lost some of that momentum in the past two days.
CEO Dana Buys said owning 100% of the US subsidiary would let the company simplify the structure of the group and gave shareholders an undiluted line of sight to the core operating entity. At the moment, the SA and US operations have different executives, different boards and separate share incentive schemes.
Jun 05 2003 07:31:21:000AM Lesley Stones Business Day 1st Edition
Thursday
05 June 2003
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
