Services group CSG Holdings has received a firm offer from Patrice Motsepe-backed ARC Fund, with a majority of shareholders in favour of delisting.
CSG, which offers staffing solutions and facilities management, said in October it had received a nonbinding indicative offer from UBI General Partner in its capacity as general partner of the ARC Fund, an investment vehicle of African Rainbow Capital.
That news had sent the group’s shares up 55% on the day, but on Monday CSG’s shares were unchanged at 34c.
ARC Fund’s offer of 35c per share is a 75% premium to the closing price of 20c before CSG issued its cautionary announcement, and values the group at about R184m.
ARC Fund, through its wholly-owned portfolio investment company Gemcap Proprietary, is a 24.8% indirect shareholder in CSG.
ARC Fund believes one of the key building blocks to a successful turnaround for CSG is to transform the group to a black-owned and controlled entity, specifically as it operates in the contract services sector where empowerment credentials are key to growth. These include, among others, the provision of catering, staffing, cleaning, security and mining services.
ARC also no longer sees the advantage of CSG remaining listed on the JSE. One of the main reasons is very low trading volumes, as a significant block of CSG’s shares are tightly held by a few shareholders and management.
The offer is still subject to shareholder approval, but the parties said in a joint statement on Monday irrevocable undertakings to vote in favour of delisting had been received by those collectively holding 61.52% of shares, excluding those held by the ARC Fund.
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