Tucker family to sell 85% Yorkcor stake
November 7, 2006
By Roy Cokayne
Pretoria - The Tucker family, which owns a controlling stake in listed forestry products group Yorkcor, is to sell its entire 84.75 percent shareholding in the company to the London Alternative Investment Market-listed Blackstar Investors and black economic empowerment (BEE) shareholders in a transaction valued at a minimum of R91 million.
Blackstar, an offshore investment company focused largely on BEE opportunities in South Africa, has an aggressive future growth strategy for Yorkcor that aims to increase Yorkcor's current market capitalisation from R100 million to R1 billion within the next four years.
In terms of the transaction, Blackstar will initially own 58.75 percent of Yorkcor with a further 26 percent earmarked for BEE shareholders, including Yorkcor's strategic BEE partner, Silulu Investment Services.
Silulu is headed by Gay Mokoena, a non-executive director of Yorkcor and company secretary of the Londoloza Consortium, which together with Paharpur Cooling Towers of India, was the reserve bidder for the government's forestry assets in Komatiland Forests (KLF).
John Lehman, Yorkcor's financial director, said yesterday that Blackstar and Yorkcor would make a mandatory joint cash offer to minority shareholders to acquire 100 percent of Yorkcor's issued share capital at R9.80 a share. Yorkcor would acquire 26 percent of this on behalf of new BEE shareholders and Blackstar would acquire the balance.
The R9.80 offer price is 21.6 percent below the market price on Friday, the last trading day prior to the announcement of the transaction. Shares were unchanged at R13 yesterday.
Lehman said the transaction value of R91 million was based on none of the minority shareholders accepting the offer but it would increase to R110 million if all of them accepted the offer.
Andrew Bonamour, a Blackstar manager, said the intention was to retain the Yorkcor's JSE listing because it was an ideal vehicle to serve as a platform for growth.
Bonamour said Blackstar intended to place between 10 percent and 15 percent of Yorkcor's issued share capital with other investors over time to increase the free-float and to take its investment below 50 percent. Lehman said Yorkcor currently had a market capitalisation of R100 million but it needed to increase this to get institutions' interest.
The new BEE shareholders comprise a range of staff and community trusts.
Solly Tucker, the doyen of the forestry industry and chairman of Yorkcor, retired due to ill health in March this year.
Tucker, who had been associated with Yorkcor since 1969, was an outspoken critic of the creation of monopolies in the forestry sector through privatisation and in defence of the company's interests.
Over the years, he frequently embarked on litigation in defence of Yorkcor evergreen log supply contracts with Safcol, the forestry parastatal, and the water affairs and forestry department and more recently intervened in competition tribunal hearings on the proposed privatisation of KLF.
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