Rivals uneasy as Investec raises its offer for Nai
Rivals uneasy as Investec raises its offer for Nail
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Did group use inside information? CEO asks
Senior Business Correspondent
THE battle for the control of up for sale Nail is getting increasingly acrimonious .
After the Investec Bank-led consortium raised its offer for Nail's assets on Thursday there was fear among other bidders and analysts that it had privileged information before the decision.
Other members of the consortium include the Mineworkers Investment Company, Tiso Private Equity Fund and Safika Holdings.
Safika chairman Moss Ngoasheng and director Saki Macozoma are linked to Nail's board. Ngoasheng is a director and Macozoma is Nail's CEO. Both said they had recused themselves from board deliberations that had anything to do with the bidding process.
The Investec consortium raised its offer from R9 to R10,50 a share saying it had just concluded a due diligence exercise that showed the group's assets were worth more than its original offer.
Soon after the announcement, which also coincided with the release of Nail's positive results, the consortium entered the market to buy Nail shares. Investec Bank had already started to exercise its options when it bought shares in Nail last month to position itself for the bidding.
Johnnic Communications (Johncom) CEO Connie Molusi said the Investec consortium's decision to increase its offer while at the same time buying the "N" shares, was of great concern.
"It is strange that once they complete a due diligence exercise they raise their offer and also buy 10-million "N" shares. Do they have access to privileged information?" he said.
Johncom, which owns 50% of BDFM, the publishers of Business Day, is also vying for the Nail assets in a grouping that includes Caxton and Kagiso Media.
Bridgeway executive chairman Bear Kumalo said to offer R10,50 for each Nail share was ridiculously expensive.
"Unless there is something that the Investec consortium knows that the other bidders are not aware of."
He said the bidding would not be seen as transparent because one of the contenders was Safika Holdings, which has an interest in Phaphama Holdings, the majority shareholder at Nail.
"Even though Ngoasheng and Macozoma excused themselves from the meetings of the bidding process, they are bound to know and have greater knowledge of what was going on than their competitors," said Kumalo.
Bridgeway is one of the black companies that originally expressed interest in some of Nail's assets and then fell by the wayside.
Tiso chairman Fani Titi argued that the initial offer of R9 was based on public information on Nail.
"But after we did a due diligence on the group we discovered that there was more value than we initially anticipated.
"Another reason we made the offer at the top end is because we wanted to speed up the bidding process," he said.
Nail executive director Kenny Setzin declined to comment on the market acquisition, but said that in terms of the due diligence exercise no group could argue that they were prejudiced against.
"All the bidding groups had access to information and this information was given equally to all parties," he said.
After the announcement of the new offer and year-end results Nail's share price gained 110c a share on the JSE Securities Exchange SA to end at 975c on the close of trade on Friday.
Sep 22 2003 07:20:10:000AM Patrick Wadula Business Day 1st Edition
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