One of South Africa’s oldest computer companies faces R335-million takeover

Mustek has informed shareholders that Novus has acquired an over 35% stake in the company, triggering a mandatory buyout offer as required by the Companies Act.

In a separate notice on the JSE’s news service, Novus said that shareholders who elect to sell can choose between receiving cash, shares, or a combination of cash and shares.

Novus has offered a price of R13 per Mustek share. Mustek was trading at close to R14.50 by the time of publication.

Alternatively, shareholders can elect to sell for R7 plus one Novus share, or trade one Mustek share for two Novus shares.

Novus was trading at R7.80 at publication time.

Novus noted that they must obtain several approvals before the deal can proceed, including regulatory approvals from the Competition Tribunal and potentially the South African Reserve Bank.

It may also require approval from the JSE, Novus said.

The long stop date for obtaining the necessary consent is 31 July 2025.

If the deal’s suspensive conditions are not fulfilled by then, Novus said it would sell some of its Mustek stake so that its shareholding becomes less than 35%.

It noted that it would follow the Takeover Regulation Panel’s directions in this regard.

Novus also reported that it had received irrevocable undertakings from three Mustek shareholders comprising approximately 20.29% of all issued shares that they would reject the buyout offer.

These shareholders are the DK Trust, Mustek managing director Neels Coetzee, and Mustek group chief executive officer Hein Engelbrecht.

Novus said it has delivered an irrevocable unconditional guarantee issued by Investec for the maximum amount payable under its mandatory offer, which is R335 million.

Mustek said its board of directors is now commencing with due processes on their side regarding this corporate action.

It advised shareholders to exercise caution when dealing in the company’s securities until a further announcement is made.

Novus’ acquisition of a sizeable stake in Mustek and subsequent mandatory offer comes after Umthombo Wealth chief investment officer Alex Duys advised that it could become a target.

Duys and Protea Capital Management CEO Jean Pierre Verster previously said that Mustek was a good investment opportunity because it is a good company that is undervalued.

Mustek’s low valuation also makes it an acquisition target. Many companies may see it as an opportunity to buy the distributor at a bargain price.

While Mustek’s results have suffered in recent years, analysts expect this to improve in 2025.

They explained that the 2020 lockdown was good for Mustek as the work-from-home revolution forced companies and workers to upgrade their home technology.

Mustek’s results should improve as the upgrade cycle kicks in following this buying frenzy.

Duys explained that Mustek previously took pain because it overstocked on renewables. Eskom’s load-shedding reprieve dropped demand for these products.

However, there was still demand for these products, and they were still selling them — albeit at lower margins.

Mustek’s management said they are actively addressing the working capital issue, which will release a lot of cash.

The higher cash flow will reduce the company’s debt and interest payments. In turn, earnings will increase. This is expected in a year or two.