Tuesday, January 18

Another flurry of eliminations hits JSE


By the time most of South Africa’s white-collar workers return to work in January, Adapt IT will no longer be listed on the JSE.

The acquisition by Canada’s Volaris will be implemented on January 3 and the shares will be delisted the following day. By then, Tower Property Fund shares will have already disappeared from the stock market, with the purchase of RDC by RDC Properties of Botswana in the last week of the year.

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New wave of eliminations to reach the JSE

While there are three large-cap offerings underway – Standard Bank buying minorities in Liberty, DPWorld’s proposed acquisition of Imperial Logistics, and Heinken’s tilt into Distell – a recommended cash offering announced in late November will make the little-known Vivo. Energy is removed from the list. of the JSE.

I live Energy

Vivo only debuted on the local market through a secondary listing in 2018.

It has a network of 2,400 service stations in 23 countries on the continent, operating under the Shell and Engen brands. The Vitol Group from the Netherlands offers £ 1.39 per share, which is roughly equivalent to R29 per share.

This gives Vivo a value of more than R36 billion, not far from Imperial Logistics and Liberty together.

Vitol, the world’s largest independent oil trader, tried to buy Vivo in February with an offer of £ 1.13 per share. This was rejected by the board. (Vitol memorably attempted to acquire Gupta-owned Optimum Coal’s 7.61% stake in Richards Bay Coal Terminal in 2017, but terminated the transaction.)

ARB Holdings

Earlier this month, ARB Holdings with a market capitalization of R1.8 billion said it had “received a non-binding expression of interest … for all issued shares in ARB excluding those owned by the current controlling shareholder and their associates “.

There are no further details at this stage, but since the founder (Alan Burke) controls 62% of the company, it is likely that the family, or their associates, will want to take the company private.

Interestingly, well-known shareholder activist Theo Botha was appointed to the ARB board in April as a “representative non-executive director” on Burke’s behalf.

If this expression of interest turns into a firm offer and is successful, the company will be delisted.

NVest

Niche financial services company NVest Financial Holdings has announced that it has received a proposal from a consortium of its three largest shareholders to acquire all the shares they do not yet own. The three trusts own 64% of the company.

NVest was listed on the AltX in 2015 on R1, and says it “believed that being listed on the AltX would further raise the profile and visibility of the organization, which in turn would lead to greater opportunities that arise.”

“It was also anticipated that the listing would help increase the liquidity of the Company’s shares and allow for an effective staff incentive plan.”

It bluntly states in its shareholder circular that “for the most part, the above expectations have not been met” and that “NVest has not benefited from the listing as planned and is not anticipated to benefit the company sufficiently to remain listed “.

The group has a market capitalization of R500 million and is trading at just under R2 per share. It will be removed from the list on February 21.

Spanish

For smaller Spanjaard, the reasons it makes an offer to minority shareholders are similar. It says the “main reason … is to remove Spanjaard from the list and to provide the company with the flexibility to carry out transactions, including BEE transactions, without the requirements of a circular due to the company’s low market capitalization, which introduces substantial delays and associated costs. ” with that”.

With a market value of just R30 million, Spanjaard says that it “believes that it is unsustainable for Spanjaard to maintain its listing on the JSE and delisting will result in substantial savings in management time and costs.” The company will go public on January 11.

In total, these eliminations represent a total market capitalization of R40 billion. This is without taking into account Liberty (to be delisted on February 15), Imperial Logistics (on the same date) and the less advanced R40 billion bid for Distell.

Others

Long4Life, which has received a R4 billion focus from Old Mutual Private Equity, will also disappear from the market in the first half of next year. The company has yet to publish a circular.

To this can be added Bell Equipment, in which the founding family will surely make another approach, following its inability to demonstrate that the previous offer was fair and reasonable.

Read: Proposed Purchase of Bell Equipment Minority Shareholders Fails

Ascendis Health reminded the market last week that “the board is considering whether Ascendis Health should remain a listed entity.” The business is much smaller after its recapitalization, and further highlights “the costs associated with listing and the limited availability of capital for growth.”

Beyond these two, Heriot Reit (real estate investment trust) and Safari are moving towards a merger, while Irongate Group (formerly Investec Australia Property Fund) continues to receive approaches from 360 Capital (and its Reit structure).

And of course Impala Platinum or Northam Platinum will win the battle for Royal Bafokeng Platinum, which will make RBPlats disappear from the market.

Read:

The battle for Royal Bafokeng Platinum heats up
Battle for SA’s platinum miner comes to the boil

Investors and market watchers have consistently said that many of our listed (and unlisted) assets remain cheap on various metrics. It seems that the owners and prospective owners agree.

There will undoubtedly be more eliminations to come.


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