Mixed joy for Altron

Johannesburg, 03 Dec 2007

Altron`s proposed R4.8 billion takeovers of part-owned, separately-listed Altech and Bytes Technology Group (BTG) has been partly scuppered.

Shareholders of the three companies met this morning to discuss and vote on the proposed buyout, which would see Altech and BTG delisting and coming under the Altron banner.

Despite market confidence that the deal would progress smoothly, Altech shareholders voted against the merger, with BTG shareholders narrowly giving the merger the nod.

Prior to these meetings, Altron - which is majority-owned and run by the Venter family - saw shareholders vote in favour of the mergers and the share issues required to fulfil the deals.

The group chose not to vote its shares in the Altech and BTG meetings.

PIC nixes Altech

A total of three Altech shareholders scuppered the company`s R3.3 billion deal with Altron. Approval by 75% of voting shareholders is required in a Scheme of Arrangement.

In total, 41 scheme shareholders participated in the Altech vote. Of these, 38 shareholders, representing 55% of the scheme, voted in favour, while three shareholders, representing 45% of the scheme, voted against.

Speaking directly after the meetings, Altron CE Robbie Venter said the group had received indications this might be the way the votes would proceed.

"The Public Investment Company (PIC) [which holds around 11% of Altech] indicated to us that the structure of the transaction went against their recently-issued corporate guidelines, so there wasn`t much we could do about that. I guess you win some, you lose some."

Narrow R1.5bn win

The BTG meeting to discuss the R1.5 billion transaction also produced indications of shareholder dissatisfaction.

Jack Shapiro, a portfolio manager at Sanlam Private Investments, told the meeting he represented a no vote.

"The no vote is based on three key factors: BTG`s dividend yield is superior to what it would be following a conversion into Altron; holding shares in Altron would effectively result in no vote shares anyway; and ongoing speculation of a possible transaction with Business Connexion leads us to believe we would be better off separate," he said.

In response, Venter asked shareholders to remember that Altron had been a far longer and consistent payer of dividends than BTG. He also said Business Connexion was not on the companies` radar at the moment. If it was, the companies would have to be trading under cautionary, he pointed out.

Of the 54 BTG scheme members voting, 46 voted in favour of the deal. They represented 76.17% of the company`s shareholding excluding Altron`s existing interest. Eight scheme members, representing 23.83% of the scheme shareholding, voted against.

Back to drawing board

Venter maintains he is still happy with the outcome of the meetings.

"We`re very pleased to have been successful in our bid for BTG. We have a lot of synergies that can be leveraged between ourselves and BTG, and we will now be focusing on getting that right," he explained.

Venter refused to be drawn on Altron`s interest in acquiring the whole of Altech.

"The board has to go back, digest and debate this decision. We believed that the structure of our offering to Altech was appropriate and of good value. But we respect our shareholders and have no regrets that we didn`t choose to vote in these meetings. We will just continue looking at our options," he said.