News01 October 2002
Masonite Africa deal is blockedShareholders of Masonite Africa favour JSE delisting Industrial Reporter WOOD and acoustic ceilings products group Masonite Africa is set to become the next small cap company to join the exodus from the JSE Securities Exchange SA. The Canadian-based Masonite International Corporation, which owns 66,7% of Masonite Africa received an "irrevocable undertaking" from the remaining minority shareholders to vote in favour of the group's delisting yesterday. If and when Masonite Africa delists, it will be following the lead set by companies like Tile Afrika and Chester, which have already delisted or are in the process of delisting. Small-cap companies are choosing to have themselves removed from the JSE because of the lack of interest from investors. Masonite Africa echoed this sentiment, saying the reason for making the offer was that its relatively low market capitalisation meant it attracted little investor interest or analyst coverage. This made it unable to raise equity at what it considered fair value to fund expansion. The group also found that its management was spending time on listing matters that was out of proportion to the benefits of the listing. The minority shareholders will be entitled to a cash consideration of R12 for every share. Masonite Africa's interim results for the six months to June showed a net asset value of about R17 a share. The group's shares have not traded anywhere near that level for some time. In the results, revenue for the group rose from R128m to R159,5m while attributable profit increased to R6,9m from R606000. There was no trade in Masonite Africa shares yesterday.
– Larry Claasen
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