By TJ Strydom
JOHANNESBURG, July 22 (Reuters) – South Africa’s largest private education firm Curro Holdings said it is considering relaunching a 6 billion rand ($485 million) takeover offer for rival Advtech, raising the prospect of a hostile bid.
Advtech’s board rejected Curro’s offer on Tuesday, saying it was not in the company’s interests. Curro, however, said on Wednesday that Advtech’s two biggest shareholders supported the bid.
A deal, if successful, could create an education company valued at more than $1.5 billion with enough financial muscle to roll out more private schools in Africa’s most advanced economy.
Curro, in a statement, said it had the backing of Coronation Fund Managers and Kagiso Asset Management, Advtech’s biggest shareholders who together hold more than 35 percent.
“Curro is still contemplating whether to resubmit an offer, albeit in a potentially different format,” Curro said in the statement.
Under the cash-and-share bid, which is at a 12 percent premium to Tuesday’s closing price, Advtech shareholders were offered 1 share for every 2.59 they hold at 13 rand per share and at least 50 percent cash for those not willing to accept shares.
Advtech’s shares climbed 5.2 percent in Johannesburg on news of a possible relaunch of the bid, to 12.20 rand, still below the bid price. Curro shares closed down 0.6 percent.
Coronation, which has a 24 percent stake, told Reuters on Wednesday that it was disappointed that the board had not referred the offer to shareholders before rejecting it.
Kagiso Asset Management, in an emailed statement to Reuters, said the offer was a fair deal.
“Their offer represented a substantial premium to the prevailing market price of Advtech and, we believed, fairly valued Advtech’s operations and its exciting growth strategy,” it said.
