Besa shareholders reject JSE's R173.2m bid
November 4, 2008
By Mzwandile Jacks
Johannesburg - The Bond Exchange of SA (Besa) and some of its shareholders yesterday rebutted the JSE's R173.2 million bid for the debt bourse, saying the offer undervalued the firm.
The New Zealand Exchange (NZX), which owns 22 percent of Besa, said it could not support the offer at the current price. The JSE is offering R90 a share, which it said was more than double Besa's net asset value, but the NZX said the offer undervalued Besa.
Last week the JSE made its offer for Besa in an attempt to consolidate Africa's biggest stock and bond markets, after Besa had spurned its approaches for the past 10 years.
The JSE said its move was in line with bourse consolidation, which had taken the world by storm in recent months.
NZX said: "It is our initial view that the JSE's offer price is extremely low and very significantly below fair value. We would not support a takeover at this offer price."
Besa's other shareholders are Investec with 15 percent, Standard Bank's corporate and investment arm (6.9 percent), the Stellenbosch-based PSG Group (6.8 percent) and Purple Capital (5.3 percent).
Mark Barnes, the executive chairman of Purple Capital, "totally agreed" with the NZX, saying the offer undervalued Besa's 12 years of running an efficient exchange.
Garth Greubel, the chief executive of Besa, said that before the offer could be supported, shareholders had to consider the fact that the firm was the sixth-most liquid bond market in the world.
This meant the offer price had to be parallel to this status.
Nicky Newton-King, the deputy chief executive at the JSE, said the bourse's valuation of Besa was "extremely fair". She added: "We are going to set out a detailed valuation of the company in our offer document, which is going to come out towards the end of the month. I am confident when they have gone through this document, they will understand our offer."
Investec, PSG Group and Standard Bank all said they would not comment.
Steve Meintjes, a senior analyst at Imara SP Reid, said the shareholders who did not want to comment were most probably the ones that had supported the bid.
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