JSE-listed industrial group Torre Industries on Monday said a consortium has expressed a firm intention to make an offer to acquire 100% of the total issued ordinary share capital in Torre.
The consortium comprises Main Street 1641, a special purpose vehicle established by Ethos Mid-Market Fund, acting in its capacity as the general partner of the Ethos Mid-Market Fund and Apex Partners, collectively, to acquire 100% of the total issued ordinary share capital in Torre.
Torre shareholders will receive a cash dividend of 35c a share, with an overall value of about R180-million.
Shareholders will also receive a cash consideration of R1.05 a Torre share, which is equivalent to an aggregate cash consideration of almost R54-million for all the Torre shares, on the date on which the scheme becomes operative.
Additionally, shareholders will receive a maximum deferred, top-up cash payment of up to 10c a Torre share, which is equivalent to a maximum cash consideration of about R51.4-million for all shares. However, this is subject to the achievement of certain performance targets.
Torre on Monday said the consortium believes the underlying businesses within Torre and its subsidiaries have limited synergies and require different capital structures, strategic goals and leadership to operate optimally and deliver improved operational performance.
Accordingly, pursuant to the transaction and after the delisting, the consortium intends to separate Torre Group into two, namely the Torre Analytical Services businesses and the Torre Industrial businesses.
Torre Analytical Services will comprise WearCheck, Amis and the Set Point Lab Divisions, which will be retained by EMMF; and Torre Industrial will comprise the SA French, Manhand, Torre and Components, Tractor and Grader Suppliers, Letaba Pumps, Elephant Lifting and Torre Logistics divisions, which will be retained by Apex.
This separation of Torre Group, the consortium believes, will unlock value by allowing the businesses to operate independently and receive focused management attention, strategy implementation and enhanced empowerment credentials.
CASH DIVIDEND
Following the abovementioned announcement, a special dividend of 35c a Torre share has been declared out of the cash and cash-equivalent reserves of the company.
Issued share capital of the company, as at the declaration date, was just over 514-million Torre shares.
Meanwhile, in light of the transaction, Torre on Monday made the decision not to pursue the potential buyback, which would have comprised the possible repurchase of Torre shares and delisting by Torre.