Radio frequency technology group Alaris Holdings has announced that a consortium plans to make an offer to acquire the entire issued share capital of Alaris, excluding treasury shares, not already held, and delist the company from the JSE.
The consortium, comprising Tadvest, CRH Investments, Conexus Capital Growth Fund Trust, Brazen Force Investments, acting as trustees for the Brazen Force Investment Trust, Nguni Investments and Chauke Investments, entered into an offer and implementation agreement with Alaris.
The offer, through a scheme of arrangement, or a general standby offer should the scheme fail, will be made at a cash consideration of R4.20 per Alaris issued ordinary share, representing a premium of 22.4% to the 30-day volume weighted average traded price of the Alaris shares traded on the JSE and a premium of 30.4% to the closing price of Alaris shares on the JSE of R3.22 as at October 8.
As part of the scheme, registered holders of Alaris shares are entitled to elect to retain all or part of their shares.
Both the scheme and the standby offer are subject to the aggregate amount payable by the consortium, under the offer and comparable offer, not exceeding the aggregate cash amount of R161-million.
In the event that the scheme becomes operative, the listing of the Alaris shares on the Alternative Exchange of the JSE will be terminated following the approval of the delisting resolution.
“The consortium and Alaris believe that there is limited benefit for Alaris being listed on the JSE, having not garnered sufficient institutional shareholder support to justify the limitations imposed by the regulatory processes and the compliance costs and other costs associated with and incidental to being listed on the JSE,” the company said in a statement to shareholders.
“Moreover, the consortium and Alaris consider the lack of liquidity of Alaris shares to impede its ability to raise capital in the market a disincentive for institutional investors, and a hinderance on existing shareholders' ability to realise their investment in Alaris in the market.”
The costs associated with Alaris being listed on the JSE outweigh the benefit of being able to publicly trade in Alaris shares and the consortium believes that the transaction and proposed delisting of Alaris from the JSE will place Alaris' management in a position to be better aligned with a tighter shareholder base which should enable Alaris to reposition the business to focus on further global expansion.
Further, it is the intention of the consortium to reposition the business of Alaris for further global expansion and, at the appropriate time, depending on the financial performance of the company and the prevailing market conditions, seek a listing on an international exchange.
The implementation of the scheme remains subject to the fulfilment or waiver, in whole or in part, of suspensive conditions, and various approvals by no later than January 31, 2022.
The independent board of Alaris, established by Alaris in relation to the offer, comprises Coenraad Bester, Carel van der Merwe and Peter Anania.