Verimark delisting opposed

Johannesburg - On Friday the court gave permission for the bigger minority shareholders in Verimark, as well as the Securities Regulation Panel (SRP), to intervene in Verimark's application for the delisting of its shares. The scheme of arrangement for delisting would have been presented to court on Tuesday, but has been postponed to early August so that the minority shareholders and the SRP can present their case.

Two large minority shareholders, Brait and Homemark, together with the SRP, maintain that minorities were excluded from the voting process when the scheme of arrangement for the delisting was approved by shareholders.

Brait and Homemark together own 15% of the 37% minority interest in Verimark.

They are unhappy because the majority shareholders, the Van Straaten Family Trust and related companies, voted in favour of the scheme of arrangement.

The minority shareholders claim that in doing so Verimark violated the generally accepted rule that minority shareholders and related parties should not vote in the case of takeovers. They also point out that most minority shareholders oppose the delisting.

Verimark chief executive Mike van Straaten points out that if the shares held by Brait and Homemark are not taken into account, only 6% of the minority shareholders voted against the scheme.

One of the minority shareholders accuses Verimark of bullying tactics because it treats minority shareholders as inferior to the majority shareholder.

In turn, Van Straaten says the two biggest minority shareholders are guilty of the same bullying tactics because they are serving their own interests and not those of other minority shareholders.

In 2005 Verimark?s shares were listed at R2.50/share, and the minority shareholders are now being offered 50c/share. Brait says it will accept an offer of R1.80 for its shares.

Van Straaten reckons the offer of 50c is fair and represents a 79% premium on the net asset value of the company's 29c on February 28 this year and 150% more than the price at which Verimark's shares were trading the day before the offer was made.

On Tuesday the share price remained unchanged at 45c, after it had fallen to a low of 10c in February.

Van Straaten claims the delisting is currently the best option for the company and its shareholders.

In its past financial year Verimark showed a R4m loss.

Shareholders are meanwhile sitting with a very low-priced share that is not very liquid. There are currently no prospects of a dividend.

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