Pretoria: Hosken Consolidated Investments (HCI), the listed black empowerment investment holding group, yesterday confirmed it was making a formal offer to acquire control of Putco, the listed passenger transport company. HCI, the investment arm of the Clothing and Textile Worker’s Union, which is its largest shareholder; said it intended to acquire control of Putco via a scheme of arrangement and had formally notified Putco’s board of its intentions. In July this year, HCI acquired the Cape-based Golden Arrow Bus company for R257 million. It also owns 50,2 percent of and 49,6& of Mettle, and has investments in Tsogo Sun (14 percent0, Vukani Gaming (96 percent) and IQ Business Group (22 percent). HCI’s notification follows the cautionary issued by Putco on Tuesday that its board had received a letter from a company which it did not name, listed on the JSE Securities Exchange, offering to purchase all or a lesser number of the ordinary issued shares in the capital of the company via a scheme of arrangement. But Putco was consulting its professional advisors and the relevant regulatory bodies as it is believed, at face value, the offer was defective, did not comply with the securities regulation code on takeovers and mergers, and was incapable of implementation in the form in which it was proposed. “Given the significant uncertainty surrounding the offer; and the fact that te offer may potentially have a significant effect on the price of the company’s securities, shareholders are advised to exercise caution when dealing in the firm’s securities,” it said. Putco anticipated that a further announcement about the bid would be published tomorrow. The offer follows Putco failing to get sufficient support from its shareholders in August this year for a proposed scheme of arrangement related to an envisaged black economic empowerment (BEE) transaction, which would have resulted in the company being delisted. Putco warned at the time that any delay or rejection of the proposed BEE scheme would have serious implications for the future of the company, adding that it would place significant pressure on negotiations with the transport department on current and potential government and commercial contracts. Prior to HCI’s announcement, Unitrans, the listed diversified transport, distribution and logistics group, was touted by some analysts as a possible suitor for Putco. But Nico Boshoff, Unitrans Passenger’s managing director, said yesterday it might have put in a bid for Putco if it had finalised its negotiated contracts with government. He said it would have been risky to make a bid for Putco with the size of its bus fleet when it had not finalised its negotiated contracts and could not guarantee the revenue streams. HCI stock was unchanged at R11 yesterday. Putco rose R1 to R7.50

Source: Business Report National – Roy Cokayne