Trio of becalmed JSE counters seek to abandon listing ship



Trio of becalmed JSE counters seek to abandon listing ship

Three small-cap companies want to leave the JSE, but at what price to their shareholders?

Marc Hasenfuss

With the sorry state of the JSE – especially desultory ratings tagged to so-called SA Inc. stocks – no one should be surprised that several delisting schemes have been mooted in recent weeks.
Three small caps – industrial services business Howden Africa, logistics specialist Cargo Carriers and direct retailer Verimark – have recently indicated a willingness to buy out minority shareholders and shuffle off the bourse.
There is a common thread running through the three counters. All trade on dismissive earnings multiples, the shares are illiquid and the share register is dominated by a single dominant shareholder.
What’s more, none of these companies would need, for the foreseeable future, to use the JSE as a platform to raise fresh capital.
Of course, the critical issue for minority shareholders is the buyout price that underpins the delisting scheme.
In these tough times, a majority shareholder has nothing to lose (aside from a reputational dent) by pitching a cheeky offer to jittery shareholders.
Cargo, refreshingly, has pitched what appears to be a very generous R21-a-share offer – representing a whopping 81% premium on the R10 share price in late January, before the first cautionary related to the delisting effort was issued. The offer also represents a nearly 40% premium on Cargo’s share price in mid-October, before details of the delisting were disclosed.
Verimark and Howden have not pegged delisting prices yet.
Verimark, which was unsuccessful with an opportunistic delisting offer in 2009, might now know the value of a more enticing offer.
Howden on Monday issued an earlier than expected trading statement, which detailed some operational strain. This might suggest that any buyout offer to minority shareholders – to be curiously conducted via a share buyback – might be on the stingy side.

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