The share price of Bell Equipment, the manufacturer and distributor of heavy industrial equipment, plunged on Thursday after the founding family’s latest bid to take the group private failed to garner enough shareholder support.
The stock weakened 13.61% after the R53 per share offer by the Bell family’s investment outfit IA Bell to buy out minority shareholders was shot down.
IA Bell counts Gary William Bell, Peter Charles Bell, the estate of the late Paul Allan Bell, Michael Allan Campbell, the estate of the late David Ian Campbell and Cecil Tree Africa Trust as owners.
IA owns about 70% of the company.
This is not the first time the family tried to buy out minority shareholders, having also made a similar bid in 2021. IA Bell’s latest buyout offer was much higher than the 2021 bid, which had offered R10 a share. The improved offer failed to sway shareholders.
Chris Logan, CIO and owner of Opportune Investments, which has shares in Bell, said it was worrying that the company failed to paint a clear growth strategy.
“The surprising failure of the scheme to buy out Bell shareholders and delist the company resulted in the share price collapsing to ... R40, well below the R53 price offered,” Logan said. “The chair of the general meeting was very guarded and provided little if any further detail as to the rationale for IA Bell making the offer to delist Bell, in particular what restructuring measures are needed to keep Bell competitive.
“A major point in IA Bell’s rationale for delisting Bell is that this restructuring is best done with Bell being unlisted. Given the failure of the scheme to delist Bell, shareholders will be left wondering as to the competitiveness of Bell in the future.”
Bell has over the years tried to make headway in an industry dominated by bigger rivals Caterpillar and Komatsu.
The group on Monday reported a decline in its half-year profit, citing a substantial softening of the construction sector in its main regions as well as in the commodity cycle.
Though group revenue for the period rose 6% to R6.3bn, profit from operating activities slipped 2% to R526m. Headline earnings per share, a measure of profitability that excludes certain items, were down 6% to 321c.
The Richards Bay-based Bell offers advance dump trucks, haulage tractors, tractor loader backhoes, front-end loaders, and sugar cane and timber-loading equipment through its nine marketing and support operations based outside SA, with more than 150 offshore distribution outlets and dealerships.
After 40 years of prosperous operation and expansion by group founder Irvine Bell, Bell Equipment made its JSE debut in 1995. Irvine’s son Gary Bell was at the helm for 34 years before retiring in May 2018. Grandson Ashley Bell took over as CEO after Leon Goosen resigned in July 2023.
With Michelle Gumede
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