AH-Vest offers minority shareholders 55 cents per share to delist from JSE
AH-Vest plans to delist from the JSE as it says the cost of listing is prohibitive considering how erratic the share price had been and the low level of liquidity of shares on the market.
Image: Supplied
AH-Vest minority shareholders are being offered 55 cents a share in cash as part of plans to delist the company, a price that represents a whopping 1833% premium over the 3 cents market price when the company first cautioned about a possible transaction.
The shares traditionally trade very rarely, and on Tuesday, they were still untraded at 3 cents a share, despite the announcement of the plans to delist via a scheme of arrangement. AH-Vest is a South African food manufacturing company best known for its range of sauces and condiments, including its All Joy brand.
The plan to delist from the JSE's AltX board comes at a time when the JSE has undertaken several initiatives to make it easier and less costly for small and medium-sized businesses to list. These initiatives include establishing the AltX board to support high-growth entrepreneurial businesses that may not yet meet the stringent JSE Main Board requirements, lowering entry requirements, and introducing designated advisors for SMEs.
The company's board said on Tuesday that they had received a firm offer from the parent company, Eastern Trading, to acquire 100% of the shares via a scheme of arrangement, as it already controls 95.7% of the shares. An independent board has been appointed by AH-Vest's board to oversee the process.
Explaining their reasons to delist, AH-Vest's board mentioned that recent changes in Section 10 of the JSE listings requirements regarding ordinary course of business, along with the erratic share price and poor liquidity, have effectively removed the justification for maintaining a listing on the JSE. Recent changes to Section 10 of the JSE listing requirements primarily address related party transaction considerations.
'The resultant cost of compliance due to the low market capitalisation is prohibitive,' AH-Vest's board stated.
They noted that Eastern Trading had not traded in AH-Vest's shares in the six-month period prior to the delivery of the offer to minority shareholders.
'In this circumstance, the proposed transaction is, in the view of the board, worthy of consideration by AH-Vest shareholders as envisaged in terms of the scheme,' the board said.
In the six months to December 31, 2024, AH-Vest reported that its revenue had declined to R100.63 million from R114.45m at the end of the same period the previous year, while headline earnings per share fell to R0.17 compared to R2.60 a year before.
An online search revealed that there were about 14 company delistings from the JSE in 2024, continuing a multi-year trend of a contraction in the number of listed companies.
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