| Monday 04 April 2022 Good morning Voornaam,
Sanlam's acquisition of the group risk and retail life business from Alexander Forbes has met all conditions precedent and will be implemented with an effective date of 31 March 2022. R100 million in cash will change hands, of which 50% is deferred and payable in two equal annual instalments. For Sanlam, this strengthens the group's position in the group risk and retail life insurance markets. For Alexander Forbes, this marks the exit of the insurance business and a focus on the stated strategy of an advice-led and capital-light model.
Speaking of deals, Net1 has released updated timing for the acquisition of Connect Group. The final condition relates to exchange control authorisations and Net1 hopes to close the deal in April 2022.
The narrative around US dollar liquidity in Nigeria is deteriorating. Last week, Nampak noted a concern around this issue and the share price took a knock in response, as Nampak's balance sheet is still fragile and the company needs to be able to repatriate profits to South Africa. The latest news around this theme is that JSE-listed property funds Hyprop and Attacq have extended the longstop date to implement the sale of the Ikeja City Mall to 30 June 2022. They are moving forward with filings to competition authorities in the meantime.
Zeder has announced that the disposal of The Logistics Group has been completed. R1.35 billion was received by Zeder on 31 March 2022 and there are additional earn-out payments of R218 million that would be received in cash if the conditions are met. These are related to extensions or renewals of agreements and Zeder hopes to receive this cash in the current financial year. There is no certainty over the remaining number being achieved.
In an exc ellent display of timing an exit at the right point in the cycle, the CEO of Grindrod Shipping is retiring after more than 14 years of service to the company. The existing CFO will also serve as interim CEO, having been with Grindrod since 2010. It's not always a guarantee that interim CEOs get the long-term job (evidenced by Absa last week), so keep an eye on this one to see how it plays out.
Gold producer Pan African Resources has announced the initiation of phase one of a share buyback programme for up to R50 million of ordinary shares. The board believes that the current share price is undervaluing the company, so buybacks are a classic tool used in these circumstances to send that signal to the market and hopefully reward shareholders who stick around with higher growth in headline earnings per share (HEPS) as there will be fewer shares in issue. Given the market cap of around R9.7 billion, this is a very small repurchase programme. The co mpany is just tipping its toes in the water here.
Deneb Investments, an investment holdings company controlled by Hosken Consolidated Investments (HCI), has announced the sale of a property in Worcester for R43.5 million. The property was previously used by Deneb for manufacturing, but this is no longer the case. The price is slightly higher than the net asset value and this is a Category 2 Transaction under JSE rules, which means no shareholder approval is required.
PPC investors will be interested to note that Value Capital Partners has bought more shares. This takes the shareholding in PPC to 15.05% of total issued ordinary shares.
Renewable energy company Kibo has amended the deal to acquire the Victoria Falls Solar Park Project in Zimbabwe. The time limit for conclusion of the due diligence (and a couple of other conditions) has been pushed out to 29 April 2022, almost one month late r than before. In a separate announcement, Kibo noted that the redemption date of its convertible instruments has been extended to 1 July 2022.
Etion shareholders should take note that the company has issued a further cautionary announcement. It has been trading under cautionary since 17th February 2022 regarding the potential disposal of one or more subsidiaries. Those negotiations are still ongoing.
Today's feature articles are on Sibanye-Stillwater's latest investor presentations and Renergen's quarterly update that shows how exciting the past few months have been.
In Magic Markets, we unpacked the interesting world of private debt. This asset class focuses on yield enhancement and returns that are uncorrelated with the broader market. We got to meet a couple of new Westbrooke team members in the process! Be sure to listen to it here and expand your knowledge of the universe of potential investments.
Finally, Chris Gilmour gives us his update on the macroeconomic and political news that is impacting the markets.
Have a lovely Monday!
The Finance Ghost
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Local and Offshore Market News |
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| | | The Week Ahead An inverted US yield curve, a looming emerging markets crisis and a rapidly slowing Chinese economy all point to a possible global recession. Read More |
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