Aspen is bringing Eli Lilly’s Ozempic competitor to the local market (JSE: APN)

Will it prove to be as popular?

Unless you’ve been living under a rock, you’ll know that Ozempic took the world by storm. People want to lose weight and they want to do it in the quickest and most efficient way, usually without making lifestyle changes. Danish pharmaceutical group Novo Nordisk made an absolute fortune from Ozempic, but competitors are catching up.

Eli Lilly is one such competitor, with the Mounjaro drug (officially for diabetes, but let’s not pretend how this stuff really gets used in practice) becoming available in South Africa this month thanks to the distribution and promotion agreement with local pharmaceuticals group Aspen.

That deal was finalised in August 2023, so it hasn’t taken them long to bring in a big-hitter. It will be interesting to see what kind of impact this has on Aspen’s numbers.

Metair’s disposal of Mutlu in Turkey was brought forward (JSE: MTA)

And now they are getting even less than people thought

Based on Metair’s recent announcement of how little they are getting out of the Turkish business disposal after adjustments for recent losses, things on that side are clearly desperate. We now have further evidence of this reality, as the closing date for the deal was brought forward so that Mutlu has the best possible chance under new ownership.

This required a new financing agreement with a syndicate of Turkish banks to be concluded, so everyone had to move quickly here.

The sad news is that the selling price after adjustments is even lower, with Metair getting just $1 million out of the deal, with the potential for that to go up to $2 million depending on how the first 60 days go.

When businesses go wrong, they can go to zero far quicker than people like to admit.

Rex Trueform is acquiring 30% in Byte Orbit (JSE: RTO)

Just don’t rely on the SENS announcement to tell you what Byte Orbit actually does

It sounds a bit like a fancy toothbrush company, doesn’t it? Luckily, that’s not what Byte Orbit focuses on, although you would have a tough time deciphering anything useful from the wording of the SENS announcement:

“Established in 2003, Byte Orbit brings two decades of expertise in digital innovation, offering high-quality solutions through a full product lifecycle approach. Byte Orbit prioritises user-centric designs, leveraging deep insights into audiences, technologies, and markets. Through its investment in Byte Orbit, Rex Trueform aims to assist in leveraging future growth opportunities, exploring emerging markets, and integrating advanced technologies while enhancing Byte Orbit’s market presence through strategic partnerships.”

What in the ChatGPT is even going on there?

Thankfully, the Byte Orbit website is a lot clearer. The TL;DR is that this is a software company, so that makes it a more interesting deal than some of the property-focused stuff we’ve been seeing at Rex Trueform. They are particularly strong in financial services, with a number of top names as clients. For example, it looks like they did the Shyft app for Standard Bank.

Rex Trueform is acquiring 30.02% in the group for a total investment of R30 million. This takes the form of a subscription for 20.47% in shares for R18 million, as well as the acquisition of 9.55% from a majority shareholders for R12 million.

What protection does Rex Trueform have here? Well, there’s a profit warranty that if Byte Orbit achieves less than R40 million in profit after tax in aggregate for 2026 – 2028 (i.e. the total over three years), then Byte Orbit will issue a further 10% shareholding to Rex Trueform for nominal value.

Still, Rex Trueform is paying a massive valuation here. The net asset value of Byte Orbit is R16.4 million and profit after tax was R3.6 million. Rex Trueform has effectively paid R30 million for 30% of those profits (R1.08 million) and 30% of the net asset value after the share subscription (30% of R34.4 million i.e. R10.32 million).

That’s not far off the P/E multiple at which you can invest in the world’s leading technology companies on the Nasdaq. They are clearly expecting massive growth based on current profits vs. the profit warranty for 2026 – 2028, but Rex Trueform (and parent company African and Overseas Enterprises Limited) could still end up getting really hurt here unless there is a much more certain future for this business than they are letting on.

Sanlam will unlock R4.5 billion through the Allianz joint venture (JSE: SLM)

Allianz is executing its step-up option

Back in 2022, Sanlam first alerted the market to the happy news that a joint venture would be put in place with Allianz. The idea was to combine efforts in the rest of Africa, with each party contributing their existing operations to the joint venture.

In order to get the size right and ensure alignment in the end result, Allianz was given an option to increase its shareholding in the joint venture to 49% through a cash transaction. The step-up transaction is now taking place, with Sanlam Emerging Markets selling 8.59% of its interest in SanlamAllianz to Allianz BV for a cash consideration of R4.5 billion before adjustments.

This takes Sanlam down to 51% and Allianz up to 49%.

Sasfin will delist at the end of December (JSE: SFN)

Good luck to the new investors – I think they will need it

If my recent experience with Sasfin’s business banking division is anything to go by, then I hope that the new investors in Sasfin put very little (if any) value on the transactional banking side of things.

Either way, things will play out in the private space rather than in the public eye, as the delisting of Sasfin is imminent. The listing will be terminated on 30th December. As part of this, Sasfin Wealth has repurchased 8.92% of shares in issue using the funds put in by investors like WIPHOLD. I wish them luck, as Sasfin doesn’t exactly come with a gleaming track record of success.

Nibbles:

• Director dealings:
  • Christo Wiese is back at it with Brait (JSE: BTI), buying R3.5 million worth of exchangeable bonds through Titan Fincap Solutions and R220k worth of ordinary shares through Titan Premier Investments.
  • An associate of the investment advisor to Supermarket Income REIT (JSE: SRI) bought shares worth £75k.
  • A director of a major subsidiary of African Rainbow Minerals (JSE: ARI) sold shares worth R1.1 million.
  • Various directors of Anglo American (JSE: AGL) accepted shares in the company as a “shares in lieu of fees” scheme. The total across three directors was £31k.
  • A director of Southern Palladium (JSE: SDL) sold approximately $21k worth of shares.
  • An associate of a director of Mantengu Mining (JSE: MTU) bought shares worth R77k.
  • A director of a major subsidiary of PBT Group (JSE: PBG) bought shares worth R37k.
  • The son of a family member of a director of Nampak (JSE: NPK) bought shares worth R5k. Start ’em young!

• MC Mining (JSE: MCZ) has given notice that the meeting to vote on the investment by Kinetic Development Group in the company will take place on 23rd January. If the deal gets approved, it completely changes the company’s future.

• As South32 (JSE: S32) recently indicated would happen, the Ministerial Statement related to the environmental approval by Australian authorities for the Worsley Mine Development Project has now been released. The environmental assessment, consultation and review process started all the way back in 2019! South32 had to go through quite a process to appeal the initial conditions of the approval, which were found to be too onerous.

• As evidenced by the latest announcement regarding changes to major shareholders, DRA Global’s (JSE: DRA) shareholder register has changed substantially as the company moves into the unlisted space. Perhaps it will one day return to public markets!

• Following the specific issue of shares for cash that Visual International (JSE: VIS) undertook to fix the balance sheet, there’s been a substantial increase in the percentage of shares held by insiders. One really has to wonder if there’s a delisting coming down the line for this obscure group with its tiny market cap.

• AYO Technology (JSE: AYO) is late with its audited financial statements. The report for the year ended August was supposed to be released on 20 December. This has now been kicked out to 16 January 2025.

• AngloGold Ashanti (JSE: ANG) announced that Alan Ferguson will replace Rhidwaan Gasant as Lead Independent Director, as Gasant has decided not to stand for re-election.