| Fri 13 Jun 2003, 9:16 | | Ex-Softline boss ups buyout stakes |
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Ex-Softline boss ups buyout stakes
June 13, 2003
By Nicky Smith
Johannesburg - Softline's management buyout consortium was given a nasty surprise yesterday morning when a higher rival offer was led by former Softline executive Ivan Ferrer.
Softline's share price climbed 11 percent on the news, jumping to R1.42 a share, 3c shy of the new offer and 12c higher than management's offer.
Ferrer is bidding with Dutch company Exact Holdings, which in its last annual report stated it had about €80 million (about R732.87 million) in cash and a market capitalisation of €385 million.
Ferrer said he had already received support and encouragement from other minority shareholders who had liked the sound of the improved offer.
"There is a lot of anger out there," he said.
In April, Softline's management, along with Investec Bank, offered R1.30 a share to shareholders. They believed the offer was fair value, but this has been dismissed by all the institutional investors.
Auditing firm KPMG's report at the end of May did not clarify anything for investors. The report said for short-term investors the offer was fair and reasonable, but it could not say the same for long-term investors.
Ferrer left Softline after differences with executives over the purchase of Softline's lossmaker, US technology company SVI.
One observer said they had parted ways acrimoniously. However, Ferrer said while he had had professional differences with Softline's chief executive, Ivan Epstein, on a personal level he and Epstein got on well
.
Faizal Moolla, an information technology analyst at Metropolitan Asset Manager, said the group had been unhappy with the way Softline's management approached the buyout.
The R1.45 offer was closer to the R1.90 to R2 a share value his group had for the company.
Ferrer said his consortium would prefer to buy out the assets, rather than buy up the shares. The latter option had more regulatory hoops.
The consortium has requested documents from Softline, citing Securities Regulation Panel approval. If they got quick access to the information the due diligence would be completed within the next two weeks.
Lara Jawitz, the communications director for Softline, would yesterday not confirm nor deny anything about Ferrer's departure from Softline. She had no comment on the new offer and would not say when a comment could be expected.
Anthony Sedgwick, a fund manager at African Harvest, which holds about 7 percent of Softline, said once the new bidders had gone through the books they would realise the company was worth at least R1.45 a share. He believed the number would be revised upwards.
"It puts the ball back in Softline's court," Sedgwick said.
Softline stock closed 16c higher at R1.44 yesterday.
