Intervid minorities view VenFin offer as cheap
March 3, 2004
By Samantha Enslin
Durban - Intervid's minority shareholders may not follow the Howard family in selling their interests in the company if VenFin offers them the same terms.
VenFin is obliged to make an offer to minority shareholders after it bought out the Howard family's stake at 34c a share earlier this week, increasing its stake from 17.4 percent to 49.8 percent.
The offer was lower than yesterday's close at 40c a share, and several minority shareholders said they would not be selling at 34c a share. Intervid has touched the all-time low of 34c only once in the past five years - and that was last Thursday.
"I am staying in, absolutely. I have full confidence in the future of the company," said Bill Lambert, the chairman and a minority shareholder.
"Staff morale was improving and they were now focusing on the company and its turnaround," Lambert said.
"At 34c I am not selling," another minority shareholder said, but indicated that he might consider selling if the offer was higher.
Jannie Durand, the chief financial officer, at VenFin, said: "We will make an offer of at least 34c to minority shareholders."
Asked why the offer to the Howards was lower than the current share price, Durand said "there was nothing sinister about it. That was the price we negotiated whereby they could by us out or we would buy them out. But we couldn't work together any more."
The Howards and VenFin have been in a bitter power struggle, which threatened to force the company into liquidation.
At the weekend the Howards backed down after being unable to find interim funding and sold their interests to VenFin.
The dispute between the Howards and VenFin was over a $50 million convertible loan extended to Intervid by RFS Holdings, an associate company of VenFin, to enable Intervid to pursue offshore opportunities.
However, if the loan was not repaid by June 2005 - which Intervid was unlikely to do - the loan would convert to equity and VenFin would take control of the business.
The Howards wanted to sell the international business to avoid VenFin taking control.
But Intervid was facing imminent liquidation after Nedbank warned at the beginning of February that a R21 million overdraft was going to be called in, unless surety could be secured by February 29.
VenFin had proposed various measures to recapitalise the business, on the condition the Howards did not pursue their attempts to reconstitute the board.
VenFin refused to bail the company out until the Howards backed down, which they did at the weekend.
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