Allied Technologies (Altech) CEO Craig Venter says he was surprised by the Competition Commission`s negative recommendation on the proposed R526.8 million NamITech acquisition and will oppose the recommendation.
Venter was speaking during the release of Altech`s interim results for the half-year period ended August 2003.
"The final ruling in response to that recommendation is in the jurisdiction of the Competition Tribunal and I am confident that due process must take its course. Both Altech and Nampak will oppose the recommendation by the commission on substantive merits," Venter said.
The Competition Commission recommended this week that the proposed merger between Altech and NamITech be prohibited, and has referred the case to the Competition Tribunal.
The commission said the proposed transaction would remove an effective competitor from the market and create significant competition concerns in both competitor and supply chain relationships.
Interim results
Altech reported headline earnings per share of 143.9c for the period, reflecting an increase of 10.1% for continuing operations over the comparable prior half-year, after taking into account a secondary tax on companies (STC) charge of 14c per share. No STC was incurred in the prior comparable period.
Revenue and operating profit for the continuing operations increased by 8.5% and 6.5% to R1.961 billion and R160 million respectively. Venter said with continuous focus being placed on strong asset management, Altech`s cash and cash equivalents had increased to an amount in excess of R1.2 billion.
Venter also announced that agreement had been reached for the acquisition of 30% equity interest in Altech`s Alcom Systems business by a black economic empowerment partner, the Matomo Group. "This transaction is also subject to regulatory authority approval," he said.
African expansion
Apart from its business in SA, Venter said the market could expect to see some expansion into the rest of Africa in the next six to 12 months, "but only if it makes sense".
Venter said the group would continue its prudent stance on making acquisitions, only doing so if the rate of return justified the purchase. The group has sat on its cash pile for some time, carefully evaluating opportunities.
"Regulatory approval for the disposal of the computer products division of Arrow Altech Distribution for a consideration of R15 million has been received, and this transaction has been concluded."
Venter confirmed that Altech was involved in discussions concerning other potential transactions which could be significant to the group`s future, and that the group was under cautionary relating to those discussions.
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