JD Group makes formal offer for Profurn.

Posted On Tuesday, 28 January 2003 10:01 Published by
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Furniture and appliance retailer JD Group has made its formal offer of R989,15m in shares to the shareholders in its rival, Profurn, for control of that company.
Furniture and appliance retailer JD Group has made its formal offer of R989,15m in shares to the shareholders in its rival, Profurn, for control of that company.

The sale of Profurn was given the go-ahead last year when the Competition Tribunal gave its conditional approval, allowing the longanticipated consolidation in the furniture retail industry to go ahead.

Analysts and retailers have long complained that the industry was over traded and that the number of retail outlets needed to be reduced.

The takeover of Profurn is a sure bet for JD Group, with FirstRand Bank which held 78% of Profurn agreeing to sell its holding.

FirstRand has already said it would sell the JD Group shares it received in payment for Profurn to German industrialist Claas Daun.

The JD Group will issue 53,7-million ordinary shares to Profurn shareholders which equates to an effective exchange ratio of 19,76 JD Group shares for every 100 Profurn shares held.

The issue price of R18,42 a share was determined by using the 120day volume-weighted average price, as traded on the JSE Securities Exchange SA, preceding the date of the announcement yesterday.

These shares, upon issue, will rank equally in all respects with existing JD Group shares.

The JD Group has obtained an indemnity in respect of certain 'due diligence differences' from FirstRand, arising out of a due diligence investigation of Profurn.

Pending the approval of Profurn's shareholders, the next stage will be the High Court sanctioning the scheme, and a certified copy of the Order of Court being registered by the Registrar of Companies in terms of the Companies Act.

Once the takeover is complete, Profurn will be de-listed from the JSE.

JD Group operates the Joshua Doore, Price 'n Pride, Russells and Bradlows chain stores in Southern African.

Its European operations consist of Abra in Poland and BoConcept in the UK.

JD Group's share price dropped 3,75% to close at R21 on the JSE yesterday, with 213486 changing hands in 199.

Business Day

Publisher: Business Day
Source: Business Day

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