The controlling shareholder of Altech and Bytes Technology, Altron, announced on Wednesday that it planned to buy out the two firms' minority shareholders to gain full ownership of the information technology (IT) and telecommunication companies, sending the two companies' share prices to their highest levels in the last 12 months.

Altron made an all-share offer to buy the 38,2% shareholding that it did not own in Altech from minority shareholders, and a further 42,3% stake in Bytes for some R4,8-billion.

CEO Robert Venter said that the transactions would simplify Altron's organisational structure, by focusing the company on two broad segments, namely Power Electronics, and Telecoms, Media and IT.

"The acquisitions proposed today are the culmination of a strategic objective to simplify our group structure that was initiated in 2001. This structure will allow us to maximise synergies and customer delivery between converging IT and telecoms markets currently served by our Bytes and Altech operations," he said.

He said that the deals would also create a single point of entry into the Altron group, while it would limit the potential strategic conflicts of interest that currently existed between Altech and Bytes in relation to corporate opportunities.

Altron would preserve the strong brand and market strength of the two companies and Venter said that the firm had "no intention" to merge Altech and Bytes.

THE OFFER

Altron is offering shareholders in Altech and Bytes a 29% premium for their shares, calculated on the respective 30-day volume weighted average price of the respective shares.

The price was paced on the day prior to Altech and Bytes first issuing cautionary announcements relating to this transaction.

Venter explained that the offers' purchase price would be settled in the form of Altron participating preference shares, unless minority shareholders chose to receive a minimum of 15% of Altron's ordinary shares, at a 7% premium to the Altron participating preference shares.

He said that Altron had had some discussions with the major institutional investors in Bytes and Altech and that it had received "somewhat of a positive response".

"A 29% premium is a very fair price," he said, adding that the company was fairly confident that minority shareholders would accept the offer.

Nedbank Capital had advised the Altech board that the offer was fair and reasonable to the minority shareholders, while Rand Merchant Bank has advised the Bytes board that the offer was fair.

Altron is offering 1,71561 of its participating preference shares for every Altech share held, and 0,43565 for every one Bytes share held.

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