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Johannesburg - Advtech’s two largest investors voted against the re-election of the company’s incoming chair and another independent director as the South African schools operator reiterated its opposition to a proposed takeover offer from competitor Curro Holdings.
Lead independent director Chris Boulle and director Brenda Gourley were both re-elected at Advtech’s annual shareholders’ meeting on Tuesday, and received less than 59% of the votes cast.
Coronation Fund Managers and Kagiso Asset Management, which voted on 33.5% of the company’s stock, opposed the re-elections, Boulle said after the AGM. He also said he will replace Jeff Livingstone as chair.
Curro has made a “conditional firm intention offer” for the equivalent of R13 an Advtech share. The share- swap proposal also includes a 50% cash payout for investors who don’t want to accept Curro’s stock.
Advtech’s board, which says it’s yet to receive a formal offer, broke off talks with Curro last week after deciding the deal wasn’t in the company’s best interests.
There were a large number of reasons for the decision, Frank Thompson, Advtech’s interim CEO, said on Tuesday. These included concerns about the company’s reputation and brands, differences in culture of the two companies and whether Curro could continue to fund Advtech’s growth plans, Boulle said. There’s nothing preventing Curro from making an offer directly to shareholders, he said.
Should Curro succeed, it wouldn’t want to change the business, said Johan Holtzhausen, managing director of PSG Capital. PSG holds about 57% of Curro’s shares.
“It would be silly for us to pay a premium and then change values, ethos and brands,” he said at the meeting.
Cash element
Any offer for Advtech should be firm and unconditional and “underpinned by a substantial cash element,” Boulle said at the meeting.
Both Kagiso and Coronation have said they’re disappointed the operator of Trinityhouse and Crawford Schools didn’t let shareholders vote on Curro’s proposal to buy Advtech.
The issues raised by Advtech’s board that don’t relate to the offer’s price are “relevant but they are manageable,” Simon Anderssen, a Kagiso representative, said at the meeting.
Coronation is “still digesting the results of the AGM and the process going forward,” and remains disappointed investors didn’t get a chance to vote on Curro’s proposal, the company said on Tuesday.
Advtech’s board commits to continue to engage with Kagiso and Coronation “in a proactive manner to try and resolve their concerns,” Boulle said after reading out the results of the vote at the meeting.
Board support
Several parents whose children attend Advtech schools expressed support for the company’s board and concern about the Curro offer at Tuesday’s AGM. At least one parent said he’d vote with his feet if the proposed takeover succeeded.
“I’d be finding a new school for my daughter, 100%,” said Nicholas Reeks. “I chose Trinityhouse where my daughter is for the morals, the level of education and the development that my child gets.”
Advtech fell 0.3% to R12.25 rand at 14:13 in Johannesburg, bringing its gain this year to 41%. Curro rose 0.4% to R34.32.
