In a significant corporate development, South African computer company Mustek is now the target of a R335 million takeover by Novus. The acquisition of a 35% stake by Novus has triggered a mandatory buyout offer, in line with the Companies Act.
Novus Makes Offer to Mustek Shareholders
Novus has formally informed shareholders of the buyout offer, with multiple options available for those choosing to sell their shares. Shareholders can either receive cash, shares, or a combination of both. Novus has offered R13 per Mustek share, while Mustek was trading at R14.50 when the announcement was made.
Alternatively, shareholders can opt for a deal of R7 plus one Novus share, or they can exchange one Mustek share for two Novus shares. At the time of publication, Novus was trading at R7.80.
Regulatory Approvals Required
Before the deal can move forward, Novus needs to secure a number of approvals, including regulatory clearance from the Competition Tribunal and potentially the South African Reserve Bank. Additionally, approval from the Johannesburg Stock Exchange (JSE) may also be required. Novus has set a long stop date of 31 July 2025 for obtaining the necessary consent.
If the suspensive conditions aren’t met by then, Novus has stated that it will sell some of its stake in Mustek, bringing its shareholding down to below 35%, as directed by the Takeover Regulation Panel.
Mustek Shareholders Reject Offer
Novus has reported that three major Mustek shareholders, holding 20.29% of all issued shares, have already pledged to reject the buyout offer. These shareholders include the DK Trust, Mustek Managing Director Neels Coetzee, and Mustek CEO Hein Engelbrecht.
To back up its offer, Novus has provided an irrevocable guarantee, issued by Investec, ensuring that the maximum amount payable under the offer—R335 million—will be honoured.
Mustek’s Performance and Acquisition Appeal
The deal comes after Umthombo Wealth’s Alex Duys, alongside Protea Capital Management’s Jean Pierre Verster, identified Mustek as a potentially undervalued company with strong investment potential. Despite recent challenges, analysts believe that Mustek’s performance could improve in the near future.
Mustek’s struggles in recent years have been attributed to factors such as overstocking on renewable products and the impacts of load-shedding on demand. However, analysts anticipate a rebound in 2025 as demand for home office technology, spurred by the work-from-home trend, continues to drive the upgrade cycle.
Mustek’s management has also been working on addressing working capital issues, which is expected to release more cash, reduce debt, and improve earnings over the next year or two.
A Caution to Shareholders
In light of the ongoing developments, Mustek has advised its shareholders to exercise caution when trading in the company’s securities until further announcements are made.
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