Afrox prepares for Linde buyout vote

Afrox shareholders will be asked next month to vote on the proposed buyout by parent company Linde, which is likely to result in it being delisted from the JSE.

The gases and equipment group sent the offer circular to shareholders yesterday following last month’s proposal by Linde. It is offering Afrox shareholders R21.18 per share, a 23% premium to the 30-day volume weighted average price of R17.21 its shares traded at on 15 October. However, Afrox will also pay a special dividend of R3.82 per share at a total cost of R1.18 billion. That lifts the premium to 58%.

The Dublin-headquartered multinational industrial gases and engineering group, which owns a majority stake in Afrox, said buying out minorities and delisting the company would put it in a stronger position to integrate their respective operations. It said shareholders would also benefit. Due to Afrox’s low share liquidity, which deters potential investors, it believed it was more suited to an unlisted environment and that the continued listing provided little benefit to shareholders.

Linde has proposed a scheme of arrangement to get the deal through, as well as a standby offer on the same terms if the scheme doesn’t become operative. Institutional shareholders including Coronation Asset Management, Kagiso Asset Management, Old Mutual Customised Solutions, Ninety One SA and All Weather Capital have already given irrevocable undertakings to support the deal. Together, they hold about 46.6% of eligible voting shares. It has also received letters of support from other managers, including the Public Investment Corporation, holding a further 16.9% of its stock that isn’t excluded from voting on the transaction.

An independent board of directors as well as Investec Bank, which was appointed as independent expert, said the terms of the deal were fair and reasonable for shareholders.

If the transaction proceeds, Afrox expects to delist from the JSE around the middle of January.

The general meeting takes place on 10 December. Afrox’s shares closed 0.4% up at R24.50 yesterday.

If the transaction proceeds, the gases and equipment group expects to delist from the JSE around the middle of January.

Afrox shareholders will be asked next month to vote on the proposed buyout by parent company Linde, which is likely to result in it being delisted from the JSE.

The gases and equipment group sent the offer circular to shareholders yesterday following last month’s proposal by Linde. It is offering Afrox shareholders R21.18 per share, a 23% premium to the 30-day volume weighted average price of R17.21 its shares traded at on 15 October. However, Afrox will also pay a special dividend of R3.82 per share at a total cost of R1.18 billion. That lifts the premium to 58%.

The Dublin-headquartered multinational industrial gases and engineering group, which owns a majority stake in Afrox, said buying out minorities and delisting the company would put it in a stronger position to integrate their respective operations. It said shareholders would also benefit. Due to Afrox’s low share liquidity, which deters potential investors, it believed it was more suited to an unlisted environment and that the continued listing provided little benefit to shareholders.

Linde has proposed a scheme of arrangement to get the deal through, as well as a standby offer on the same terms if the scheme doesn’t become operative. Institutional shareholders including Coronation Asset Management, Kagiso Asset Management, Old Mutual Customised Solutions, Ninety One SA and All Weather Capital have already given irrevocable undertakings to support the deal. Together, they hold about 46.6% of eligible voting shares. It has also received letters of support from other managers, including the Public Investment Corporation, holding a further 16.9% of its stock that isn’t excluded from voting on the transaction.

An independent board of directors as well as Investec Bank, which was appointed as independent expert, said the terms of the deal were fair and reasonable for shareholders.

If the transaction proceeds, Afrox expects to delist from the JSE around the middle of January.

The general meeting takes place on 10 December. Afrox’s shares closed 0.4% up at R24.50 yesterday.

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