The board of listed passenger transport company Putco on Thursday said it is of the opinion that the offer by Hosken Consolidated Investment (HCI) to buy it out is defective.
The company added that the offer does not comply with the Securities Regulation Code on Take-Overs and Mergers and is incapable of implementation in the form in which it is proposed.
The board and its professional advisers have accordingly consulted the Securities Regulation Panel (SRP) regarding the offer.
According to Putco, the SRP has obtained independent legal advice confirming that the offer is not capable of implementation without the SRP granting a general exemption or dispensation in terms of Rule 34 of the code.
The SRP has advised Putco that it will not grant such a dispensation.
Hosken intends to offer to purchase all or a lesser number of the issued ordinary shares in the share capital of Putco via a scheme of arrangement in terms of Section 311 of the Companies Act 61 of 1973.
If the scheme is implemented, Putco shareholders will be obliged to sell to HCI (or its wholly-owned subsidiary) 38% of all the Putco shares held by them (excluding the 30 cent Putco dividend) for an amount of 550 cents per Putco share. The remaining balance of each Putco shareholder’s shares will be purchased by HCI, if offered for sale by a Putco shareholder (excluding the 30 cent Putco dividend), for an amount of 750 cents per Putco share.
The entire offer is subject to the acquisition by HCI of not less than 51% of Putco’s issued ordinary share capital.
The company added that its shareholders will be informed of material developments in relation to the offer, if and when these occur.
As a result of the above, and the fact that the company has received indications of interest from other potential parties — which, if concluded, may have a material affect on the price of the company’s securities — shareholders are again advised to exercise caution when dealing in the company’s shares until a further announcement is made. — I-Net Bridge