Alexander Forbes is being scouted by a horde of private equity investors for nearly P 7.8 billion (R 9.1 billion including dividend) for its operations in the three southern African countries but the offer was rejected off hand by shareholders late last week.
A firm decision issued Thursday through the Johannesburg Stock Exchange set the price at R 16 per share; it was rejected. The decision will see the company being de-listed on the JSE and other secondary listings, such as Botswana Stock Exchange and Namibian Stock Exchange, at the same time if the offer is going to be upped.
According to reports, a consortium of equity investors from Canada and other parts of the western world, led by Actis Africa Fund 2 LP and acting through Cleansheet Investment, are aiming to acquire the entire shareholding of Alexander Forbes.
“This is a well run company but had some problems about two year ago. What happened is that the private equity funds have identified value before everyone else and they will drive on that until they get their return before selling it to someone else,” Tapologo Motshubi, an analyst at Allan Gray said.
The company has 460 million shares in issue with about P 7.3 billion and the remaining part is dividend due after June this year. However, smaller markets, like BSE, will be worried about losing a listing since they are at an infant stage.
But the South African market stands to benefit through its Black Economic Empowerment (BEE) strategies since Shanduka Group will be allowed to hold at least 30 percent of the new entity if the bidders are to increase their price offer from R 16.00.
And the situation is still fluid about the Botswana situation where it is not clear as what stake Batswana own at the company. Attempts to get clarification from the domestic company about Batswana’s shareholding in the company were futile Friday.