Three-week adjournment of meeting on LNM's Iscor offer
Minority shareholders in South African steel group Iscor have agreed yesterday to adjourn the special meeting regarding LNM's partial offer for the South African firm. LNM requested this adjournment in order to find time for further talks with the key minority shareholders in this respect.
LNM's offer is to buy 12.19% stake of Iscor's at a price of R30 per share which would take its total shares up to 47%.
Finding a loophole in the South African law that enables the company to make a partial offer instead of a full offer whereas it is normally required to make a full offer when stake of an investor in a domestic company exceeds 35%, LNM asked the investors to waive this requirement.
Some investors are against such action as they believe that LNM wants to take control of Iscor without making a fair premium payment. They believe that such waiver request will be rejected. In case of such rejection, LNM stated that it will withdraw from South
Africa, selling its existing shares in Iscor.
To eliminate worries that Iscor will be left illiquid if LNM starts increasing shares, LNM declared last week that it will make a general offer in case its stake in Iscor reaches 60%.
If the partial offer to minorities is successful, LNM will be carrying its stake over 50% by early next year. This would mean LNM gaining control over Iscor, which the government seems not to be too willing for. However, in case of a refusal by shareholders if LNM walks always as it stated, Iscor might need to look for another international partner.