The Board of Directors of the Bond Exchange of South Africa Limited (BESA) has confirmed that it will support the JSE’s revised offer at R125 per share for the JSE to acquire 100% of BESA. This was communicated in a joint announcement issued by the two Exchanges earlier today and comes on the back of the JSE’s original firm intention announcement of 27 October 2008 to acquire all the shares in BESA.
This higher offer of R125 per share is a 39% increase over the original JSE offer and represents a value more than 31% over BESA’s consolidated NAV as at the recent rights issue date. The new offer is within the value range indicated by independent advisors, Ernst & Young.
“At these levels, the Board can recommend the transaction to shareholders based on value,” says Garth Greubel, BESA’s CEO.
As part of recommending the JSE’s revised offer, the BESA Board has also agreed important market structure fundamentals, following extensive discussions with the JSE.
“Our feedback from BESA market participants indicates clearly that key elements of the current market structure are important to its ongoing efficiency. BESA and the JSE have agreed on this. Post integration, the key bond market fundamentals will remain in place and will be supplemented by a wide ranging review of all products, services and infrastructure. This fixed income growth strategy will be a consultative exercise aimed at ensuring that the local fixed income market advances in line with global trends,” adds Greubel.
“The BESA Board has been guided in its deliberations by the wide-ranging support shown by BESA shareholders for this revised offer, and the merger of the respective businesses. In evaluating the revised JSE offer on the basis of increased value, shareholder support and the confirmation of market structure fundamentals, the BESA Board is confident that the envisaged benefits of a merger can be delivered in the interests of South Africa’s capital markets,” adds Jonathan Berman, non-executive director of BESA who has led the BESA Board’s Independent Deal Committee.
“As this transaction works its way through the various regulatory approvals, we will continue to operate the business as usual. It is very important that our service to bond market participants remains at a high level and that market operations continue unhindered for issuers, investors and trading participants. As an organisation, BESA has been instrumental in building better capital markets in South Africa over the past dozen years. We are confident that this expertise, knowledge and understanding will be well utilised in the merged JSE/BESA group for the benefit of the country’s financial markets.” concludes Greubel.
