The Takeover Regulation Panel (TRP) has ruled that the DK Trust acted in concert with JSE-listed printing and packaging company Novus Holdings in its mandatory offer for computer and technology distribution company Mustek, also JSE-Listed, which was announced on November 15, 2024.

The decision, detailed in a 34-page ruling by TRP’s deputy executive director, Zano Nduli, mandates immediate compliance with takeover regulations.

The TRP concluded that the DK Trust’s irrevocable undertaking, signed on November 13, 2024, not to accept the mandatory offer or sell its Mustek shares until the offer closed, was “a critical enabler” of Novus’s R13-per-share bid.

“The DK Trust’s waiver undertaking… reduced Novus’s financial exposure under Regulation 111 by approximately R123 million,” Nduli wrote, lowering the required bank guarantee from R458.9 million to R335m. This, the panel found, met the definition of “acting in concert” under Section 117(1)(b) of the Companies Act, which covers cooperation “for the purpose of entering into or proposing an affected transaction or offer.”

Evidence showed the DK Trust’s deep involvement. On October 17, 2024, trustee Hein Engelbrecht discussed share sales with Novus, leading to a November 8 resolution authorising Mustek Electronic Properties (MEP), a DK Trust subsidiary, to sell 3.685 million Mustek shares to Novus at R12 each—netting R44.2m.

On November 12, the undertaking became a condition of a consortium agreement with Novus, finalised the next day. Nduli dismissed Novus’s claim that the undertaking only facilitated the MEP sale, saying, “MEP had no need for such an undertaking given its complete divestment of Mustek shares.”

The panel criticised the parties’ submissions. Michael Kan, a DK Trust trustee, claimed deliberations were verbal, unsupported by documents—an assertion Nduli called “absurd.”

Engelbrecht’s refusal to detail trust discussions, despite signing the sale resolution, drew similar scrutiny. “These inconsistencies… support the conclusion that the DK Trust was not acting independently,” the ruling stated.

The ruling requires Novus to list the DK Trust as a concert party and re-evaluate the offer under Section 123 and Regulation 111, considering pre-offer trading by all parties.

Mustek’s shares fell 2.7% to R14.05 on Tuesday’s close, while Novus's shares closed the day flat at R7.

Novus’s SENS statement said, “Novus has however been advised by the TRP that the Takeover Special Committee is not currently constituted. Accordingly, should Novus wish to appeal, or review, the TRP Ruling, it will need to approach a High Court of competent jurisdiction. Novus will, after taking advice, advise Mustek Shareholders whether or not it will proceed to appeal, or review, the TRP Ruling.”

The ruling hinges on the undertaking’s role.

“By the Submission’s own admission, the DK Trust undertaking was a critical piece in determining whether the mandatory offer could be pursued,” Nduli said, rejecting Novus’s argument it would have proceeded regardless. The MEP sale, he argued, was “consideration from Novus to the DK Trust for securing the undertaking,” linking their interests.

Parties have five business days to appeal to the Takeover Special Committee. For now shareholders await clarity on its next steps.

BUSINESS REPORT