Shareholders owning more than 90% of the shares in CS Holdings have accepted Bytes Technology Group`s (BTG`s) offer to buy their stake.
As a result, BTG has invoked section 440K of the Companies Act, giving it the right to compulsorily acquire the shares of those shareholders who did not accept the offer.
BTG`s now unconditional offer is to acquire the entire issued share capital of CSH by issuing BTG shares in the ratio of one BTG share for every 37 CSH shares held, which equates to a price of 15.68c per CSH share.
BTG opened its offer on 8 October, after being named the preferred bidder for CSH in June.
This was after three other suitors - Reunert, EOH and UCS Group - walked away from making a deal.
The events leading up to the buyout of CSH began in February with allegations of wrongdoing surrounding the disposal and subsequent cancellation of the sale of a business called EDD.
A restatement of the group`s results after the cancellation of the sale led to allegations that CSH had artificially boosted its profits by selling the asset for R18 million after acquiring it for R2.5 million and then reversed the sale after its financial results were published.
Although an internal investigation cleared the CSH management of any wrongdoing, CEO Annette van der Laan resigned in late February, citing negative publicity and the interests of the company as the reasons for her move.
In July the GAAP Monitoring Panel, a joint initiative of the JSE and the South African Institute of Chartered Accountants, said it had determined that CSH`s financial statements for the 2002 interim period, the 2003 annual results and the 2003 interim results were deficient.
The issue took its toll on CSH`s share price as well as its business. Acting CEO Dave Vink said in September that the uncertainty around the business operations had a negative effect on the ability to win new business.
Ultimately, he said, the ability of CSH to continue operating was dependent on the backing of a white knight such as BTG.
The CSH share, which gained 1c to close at 18c on the JSE yesterday, was unchanged early this morning. The share`s highest close this year was 75c, recorded on 3 February.
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