Eqstra CEO Walter Hill. Picture: FINANCIAL MAIL
Eqstra CEO Walter Hill. Picture: FINANCIAL MAIL

EQSTRA on Thursday formally offered 60c per Protech Khuthele share in its bid to buy the remaining 67.2% of the construction firm it does not already hold.

It said the offer was at a premium of 40.7% to the 90-day volume-weighted average traded price of Protech shares on the JSE on December 4, two days before the deal was announced.

Eqstra owns 32.8% of Protech and has secured a further 30.3% irrevocable undertakings in support of the offer.

"This full and final offer provides Protech shareholders with an attractive cash price to realise fair value at a healthy premium," Eqstra CEO Walter Hill said on Thursday. The offer positioned Protech "to benefit from the synergies and economies of scale that can be achieved by sharing resources".

Mr Hill said Protech had "underperformed for sometime" and had been undergoing a substantial turnaround process in the past 18 months. The strategy to change its bad fortunes had not yet borne fruit.

In December, Protech offered a robust defence of its turnaround strategy, after it announced a return to profitability in the six months ended August. This was from a loss at the end of the previous year.

Chairman Mafahle Mareletse said at the time the company was turning around its fortunes under CEO Antony Page.

Mr Hill said Eqstra would co-brand itself with Protech and wanted to delist the company to "ultimately optimise value".

In a separate announcement on Thursday, Eqstra said Rio Tinto had declared force majeure at its Benga coal project in Mozambique where it is the contract miner. This was after flooding damaged the railway transporting coal to the port of Beira.

Mr Hill said Benga was less than 10% of Eqstra’s annual turnover. "We’ll keep the market informed of developments."