Value Group announces plan to delist from the JSE

The warehousing, distribution and logistics group says it does not make sense to remain listed as its shares barely trade.

Value Group is going ahead with an offer to buy out minority shareholders as a precursor to delisting its shares from the JSE.

The warehousing, distribution and logistics group has proposed a scheme of arrangement to acquire outstanding stock for R6.75 per share in cash. Alongside the scheme, it will make a general offer on the same terms. However, if the scheme, which requires the approval of shareholders holding 75% of its stock, is implemented, the general offer will lapse.

The offer price is a 48% premium to its closing price on 17 February, the day before the company cautioned shareholders of its intentions.

Value Group said due to its tightly held strategic and controlling shareholding, there was little interest in the shares from institutional investors, resulting in extremely low liquidity and little trading. In recent years, share trading statistics showed that its own stock repurchases were the only meaningful source of liquidity available to shareholders wishing to trade their shares.

Almost 58% of the company’s shares are held by majority indirect shareholder Steven Gottschalk through Lougot Property Investments and 471 Church Street Pty Ltd., while a further 18% is owned by its black economic empowerment shareholders.Accordingly, the Board believes that the Company’s continued listing on the JSE does not justify the costs associated with being a listed entity and a participant in the regulated markets environment,” Value Group said. “From a shareholder perspective, the costs associated with Value Group being listed outweigh the benefit of being able to publicly trade in Value Group shares.

The company said the delisting would free management up to spend more time and resources on its business operations.

Its shares rose 3.2% to R6.50 on Friday.

Main Image: Masimong Group Holdings