Allied Electronics Corp., a maker of pay-television set-top boxes, offered to buy the shares it doesn’t already own in Allied Technologies Ltd. to simplify the structure of the two companies and make savings.
Allied Electronics, also known as Altron, will offer 47.50 rand in cash for each Allied Technologies share, the Johannesburg-based company said in a statement today. That values Altech at 5.04 billion rand ($532 million), according to data compiled by Bloomberg.
The offer equates to a 32 percent premium to Altech’s closing price of 35.96 rand on March 20, the last trading day before the company said it was in talks that could materially affect the share price.
Altron already owns 61 percent of Altech’s shares, it said in the statement.
“From the Altron shareholders side it’s probably not the greatest deal especially given that they are offering quite a premium for the shares,” Dirk Noeth, electronics analyst at Avior Research Pty Ltd, said in a telephone interview from Cape Town.
Altech shares rose 30 percent to 44.60 rand at the close of trading in Johannesburg, giving the company a market value of 4.7 billion rand ($500 million). Altron shares were unchanged at 20.50 rand.
The transaction will “simplify the corporate and operating structure of the Altron Group” and “enable the maximisation of synergies”, Altron said in the statement today. Altron Chief Executive Officer Robert Venter is the brother of Altech counterpart Craig.
Altech shareholders may receive 2.22 Altron shares for each Altech share they own instead of cash, Altron said.