Investment holding company IAB, which is owned by representatives of the founding family and affiliates of Bell Equipment and holds 70.13% of the company's issued shares, has offered to buy the remaining shares for R53 a share.
This is a premium of 82.3% to the 30-day volume-weighted average traded price of Bell Equipment Shares on the JSE of R31.
If the IAB offer is successfully implemented, IAB, together with the excluded shareholders, will own 100% of the issued shares, excluding the treasury shares.
The excluded shareholders include those who are related to the founding family of Bell Equipment and certain third parties. They hold 14.82% of the issued shares, excluding the treasury shares, between them.
"IAB believes that, for the company to remain competitive and to adapt and grow in an increasingly competitive industry, it should be restructured to better position itself in the global arena and to enhance its agility and flexibility in decision-making, which is not suited to the listed environment," IAB said in a joint statement with Bell Equipment on July 15.
IAB is of the view that Bell Equipment derives limited value from its listing, as the primary benefits of a listing including share liquidity and the ability to raise capital, are constrained.
The listing comes with significant costs, both quantitative and qualitative, which do not appear to be commensurate with the benefit derived.
In the unlisted environment, the board and management will be able to take a longer-term view in their approach to managing the company and its business undertakings, particularly where certain strategic decisions are necessary, which are unlikely to yield positive short-term financial results.
Further, the scheme would also afford minority Bell Equipment shareholders the opportunity to exit their investment in Bell Equipment at a significant premium to the market price, which would otherwise be a challenge in the current market where there appeared to be a lack of investment appetite in small-cap stocks, the companies added.
The company's share price on the JSE rose by more than 48% on the news.