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Ghost Bites (Accelerate Property Fund | Delta Property Fund | MAS | Schroder European Real Estate)

The Finance Ghost
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Ghost Bites (Accelerate Property Fund | Delta Property Fund | MAS | Schroder European Real Estate)

Accelerate hasn’t locked in a revised related party settlement agreement yet (JSE: APF)

But this won’t affect the rights offer or the release of results

There’s a lot going on at Accelerate Property Fund, with the company trying hard to create as much distance as possible between itself and Michael Georgiou, who is no longer even on the board. The one remaining issue tying the parties together is the related party settlement agreement dealing with claims stemming from the development of Fourways Mall.

The previous agreement lapsed as suspensive conditions weren’t fulfilled in time. The parties are still working towards a new agreement, which they’ve promised is on much the same terms as the last one. Of course, until an agreement is actually signed, there’s no guarantee of anything.

Thankfully, the rights offer of R100 million that opens on 14 July is unaffected by this, with the underwriter reaffirming its position and Investec also confirming that it remains a committed subscriber. This is enough to guarantee that the R100 million will be raised.

Another important point is that the March 2025 annual financials are still expected to be published by the end of July 2025 regardless of whether a new agreement is signed or not.

If the parties do come to an agreement on the current proposed terms, the balances with related parties would be offset to zero and there would be no cash outflow for the group. If the parties don’t come to an agreement, then Accelerate believes that the R800 million related party receivable probably has no reasonable prospect of recovery, leading to a full impairment. They would also have to consider the ongoing validity and quantum of the claims against them, which would otherwise be offset against the receivable if the parties reach an agreement.

In a turnaround story like this, getting rid of remaining overhangs for the share price is a huge priority.

Delta Property Fund’s latest disposal highlights the plight of CBDs in South Africa – except Cape Town (JSE: DLT)

Inner city property is a wild game to play

Delta Property Fund is still in the process of trying to sell off as many properties as possible to reduce debt over time. Occasionally, when they manage to secure a large enough sale, they have to release a detailed circular to shareholders. The disposal of 88 Field Street in Durban is so meaningful that it is a Category 1 transaction under JSE rules!

This disposal is a lucky break of note, as tenants occupying over 73.4% of the property are either confirmed to be vacating the property or likely to depart. This will take the vacancy rate to 82.5%. The Durban CBD has very high vacancies at the moment vs. the national average (22.5% vs. 13.6%) and is a crime hotspot, so tenants aren’t exactly queueing around the corner to get their names on the door. And if they were queueing, their cellphones would probably be stolen anyway.

Whatever the plans of the purchaser are, it will surely be to do something very different to what Delta could’ve done with this property. It’s rare to see such a bearish narrative about an asset from its current owner.

The valuation as at 28 February 2025 was R93.83 million. The selling price is R76 million, so that’s quite a discount. The Broll Auction and Sales process in March 2025 led to this sale and this was the price achieved at that auction.

But here’s the real shocker: the property was originally acquired in 2012 for R120 million. Over 13 years, the value of the property has dropped by 37%! It’s not like the decline of CBDs in cities like Durban is news to anyone, but seeing numbers like these really does drive the point home.

Although every bit helps, the fund will still have R2.37 billion in short-term interest-bearing borrowings and another R1.4 billion in long-term interest-bearing borrowings after applying the R75 million in net proceeds towards debt reduction. This balance sheet is a deep, dark hole.

MAS has finally appointed a corporate advisor (JSE: MSP)

And the results of the shareholder meeting are in

MAS finds itself at the centre of a storm. On one side, we have Prime Kapital and their efforts to pressure the board into following a value unlock strategy, using the cash trapped in the joint venture with MAS as a negotiation tool. On the other, we now have a group of South African asset managers who have posed some very pointed questions to the board regarding historical disclosure around that joint venture agreement.

And theoretically at least, Hyprop is waiting in the wings to make a potential offer to shareholders.

It is very unwise for companies to try and navigate this without assistance, as corporate finance is a specialist field. MAS has appointed Investec as its corporate advisor to help it deal with any potential offers that may emerge for the company, as well other strategic options for the company.

And now for the even more important news: the results of the shareholder meeting that was called by Prime Kapital. Remember, this was a sounding process to ask shareholders for their opinions on whether MAS should start selling off its assets and pay special dividends. If you include Prime Kapital’s votes, then it’s a 50-50 split. If you exclude Prime Kapital, then a whopping 89% of shareholders were against this plan. Ouch.

Prime Kapital is firmly in an “us vs. them” scenario here – and it’s a fight that I think is only just warming up!

Schroder European Real Estate’s portfolio is a mixed bag (JSE: SCD)

There’s no clear uptick here in European property valuations

European property isn’t an easy way to make money, mainly because many of the underlying growth drivers for property (like an increase in the population and economic growth) are sorely missing from the more developed markets in Europe. Southern Europe is the exception right now, with companies like Lighthouse investing heavily in Iberia. And in Germany and the UK, Sirius Real Estate is following an active asset management strategy to buy low and sell high. But as for Schroder European Real Estate, the fund that is the focus of this update – well, there’s no particularly defining feature of their strategy.

This leaves them exposed primarily to the macroeconomic situation in Europe, which the market is doing its best to get excited about as investors look for opportunities outside of the US. When you see European banks trading at elevated levels, it tells you that sentiment has shifted positive. This isn’t filtering down into property values just yet, with Schroder’s portfolio valuation as at 30 June 202 being a mixed bag. Overall, the office portfolio is under pressure and they took a knock from the value of a mixed-use data centre, which is rather interesting. Positives were in the industrial portfolio in France and the Netherlands, along with an important asset in Berlin that was boosted by the conclusion of a new 12-year lease.

Regulatory changes also aren’t helping, like an increase in transfer taxes in France that have impacted valuations.

Nibbles:

  • Director dealings:
    • The CEO of Vunani (JSE: VUN) bought shares worth R51.4k.
  • I feel ridiculous even writing this, but here we go. Blue Label Telecoms Limited (JSE: BLU) has decided to change its name. You’re going to love this one. The new name is Blu Label Unlimited Group Limited. I truly wish I was joking. Dropping the “Telecoms” part of the name is a precursor to the planned separation of Cell C. The change from “Blue” to “Blu” is to match their branding. Fine, but was it really necessary to add in “Unlimited” and create a daft situation where the latter part of the name is “Unlimited Group Limited” – sigh.
  • PSG Financial Services (JSE: KST) announced that GCR has upgraded its credit rating from AA-(ZA) to A+(ZA) (long-term) and from A1(ZA) to A(ZA) (short-term), with a stable outlook. The company notes that this is the fifth rating upgrade received over the past ten years, which is quite something! As I always remind you, the credit rating is not a comment on the current share price and whether it represents a good point to invest. It’s merely a comment on the strength of the business and how well it can service debt. Having said that, it’s of course good news to see this rating heading in the right direction.

PODCAST: No Ordinary Wednesday Ep104 – How South Africa can shift gears for growth

Investec No Ordinary Wednesday
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PODCAST: No Ordinary Wednesday Ep104 – How South Africa can shift gears for growth

Listen to the podcast here:

South Africa has spent more than a decade in economic drift – growing slower than its emerging market peers, losing investor confidence, and missing out on vital tax revenue. So, how do we get back on track? In this episode of No Ordinary Wednesday, Jeremy Maggs is joined by Cumesh Moodliar, CEO of Investec South Africa, and Osagyefo Mazwai, Investment Strategist at Investec Wealth & Investment International, to unpack the hard truths, and outline a roadmap to recovery and long-term prosperity.

Hosted by seasoned broadcaster, Jeremy Maggs, the No Ordinary Wednesday podcast unpacks the latest economic, business and political news in South Africa, with an all-star cast of investment and wealth managers, economists and financial planners from Investec. Listen in every second Wednesday for an in-depth look at what’s moving markets, shaping the economy, and changing the game for your wallet and your business.

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Also on Apple Podcasts, Spotify and YouTube:

Ghost Bites (Renergen | Southern Palladium)

The Finance Ghost
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Ghost Bites (Renergen | Southern Palladium)

Renergen shareholders give a resounding yes to the ASP Isotopes deal (JSE: REN)

There was never any doubt, let’s be honest

There are companies out there that have a lot of options. I’m afraid that Renergen isn’t one of them. For all the reasons that everyone has talked about ad nauseum, the company has ended up disappointing investors and burning a serious hole in the balance sheet. ASP Isotopes appeared on the horizon to save the day and the rest is history.

Well, not quite history – although Renergen shareholders voted almost unanimously in favour of the transaction, they still have a number of regulatory conditions to get it through by 30 September 2025. Although it’s technically possible for the parties to agree to extend that date, there are many examples of deals where this doesn’t happen.

At this stage, it’s far more likely than not that the deal will go through. But until shares have been issued and everything has been completed, there’s always a risk of it failing.

Southern Palladium has released an optimised prefeasibility study (JSE: SDL)

A more staged approach improves the expected returns

As anyone who has studied capital budgeting and net present value (NPV) calculations will know, the timing of cash outflows (and inflows) makes a significant difference. If you can delay certain elements of a project and reduce the reliance on expensive external capital, then it can really improve returns. The devil is always in the detail on this, but many mining companies are taking this approach in their prefeasibility study calculations.

At Southern Palladium for example, the prefeasibility study for the 70%-owned Bengwenyama PGM project has been optimised with a staged approach that suggests an internal rate of return (IRR) of 26.4%. This is based on the production rate increasing over 4 years.

But it’s not just about the expected return – it’s also about the amount of capital to be raised and what this means for the practicalities of the deal. The peak funding requirement has dropped by a massive 38% to $279 million, mainly because stage 2 expansion capital is expected to be funded by internally generated cashflow from stage 1. The payback period is estimated to be 6 years from the start of construction.

Naturally, the prevailing PGM price will lead to substantial volatility in the returns actually achieved by shareholders. This calculation assumed a basket price that is only 6% below the current level, so there isn’t much margin for safety here. With the long-expected shortage in PGMs finally playing out, this is a good time to be releasing an announcement like this.

A preliminary development schedule has been compiled for the project, with the immediate next step being the issue of a mining right. They need to complete drilling and then a definitive feasibility study, all before there’s a final investment decision and the raising of the required capital to develop the mine.

Nibbles:

  • Director dealings:
    • Calibre Investment Holdings, in which two directors of Goldrush (JSE: GRSP) have a non-controlling interest, sold shares in Goldrush worth R79.4k.
  • Jubilee Metals (JSE: JBL) is working on the sale agreements for the disposal of the chrome and PGM operations, with the expectation being to release the deal circular during the last week of July. They also have one eye on future capital raising needs, appointing Shard Capital Partners as joint broker with immediate effect to replace RBC Capital and work alongside Zeus Capital.

Who’s doing what this week in the South African M&A space?

Marylou Greig
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Who’s doing what this week in the South African M&A space?

Exchange-Listed Companies

South32 has entered into a binding agreement with a subsidiary of CoreX Holdings to disinvest its Cerro Matoso open-cut mine and smelter located in Córdoba Columbia. The transaction follows a strategic review by South32 in response to structural changes in the nickel market. CoreX will make future cash payments to South32 of up to US$100 million for the acquisition which is expected to complete later this year.

Stefanutti Stocks (SSH) has terminated the 2022 agreement it signed with Mauritian CCG-Compass Consulting Group to sell its businesses in Mozambique and Mauritius. As part of the restructuring plan agreed to by the Board and lenders, SSH has entered into an agreement with East Africa Enterprises, a privately owned business established in the Dubai Multi Commodities Centre Authority. SSH will receive an aggregate of US$3,9 million for the businesses with $700,000 payable for the Mauritian entity and a total of $3,2 million for the Mozambique subsidiary. The proceeds, payable by 31 December 2025, will be used to reduce the current funding facilities. The deal is categorised as a Category 2 transaction.

In a move that will enable Southern African Clothing and Textile Workers’ Union (SACTWU) to increase its investment in property and generate more regular cash flow, Hosken Consolidated Investments (HCI), through its subsidiary Squirewood Investments 64, will undertake two related party transactions. HCI will repurchase 1 million of its own shares from SACTWU for R144.1 million, at a price of R131 per share, representing c.1.3% of HIC’s issued share capital. Simultaneously, SACTWU will acquire three properties from HCI for R549,5 million. The properties are Gallagher Estate Holdings, HCI Rand Daily Mail and HCI Solly Sachs House. The transactions will reduce HCI’s share capital and consolidates its ownership structure.

This week, the Competition Commission reached an agreement with Vodacom and Remgro on revised conditions which will see the competition concerns by the Commission remedied. The merger of the fibre businesses was announced in November 2021 whereby Vodacom would take 30% stake in Maziv valued at R9 billon, with the option to increase the shareholding by 40%. The matter will now proceed to the Competition Appeal Court on an unopposed basis.

In its latest update, Primary Health Properties plc (PHP) says it has received valid acceptances for c.1.14 of Assura shares under the revised offer. Assura shareholders have until 12 August 2025 to accept the revised offer.

According to Bloomberg, Glencore is to sell its struggling copper refinery in the Philippines for an undisclosed sum. The refinery was placed on care and maintenance earlier this year. The purchaser of Philippine Associated Smelting and Refining (Pasar) is the local Villar family, with significant stakes in the sectors of construction, property and retail.

Unlisted Companies

NTT Data, the Japanese multinational headquartered in Tokyo, will dispose of local digital solutions provider, Britehouse Mobility, in a management-led buyout. Following the deal the company will re-brand to Britehouse and will operate as a fully independent company continuing to provide solutions specialising in the development and integration of customised platforms, products, and consulting services. Financial details were undisclosed.

Sub-Saharan African private equity fund manager, Phatisa, has exited its investment in Deltamune, a South African-based vaccine manufacturer. Acquired in 2022 by the Phatisa Food Fund 2, Deltamune has scaled its footprint into three new markets, broadened its product portfolio and deepened its distribution capabilities. In the next phase under Vaxxinova International’s stewardship, both companies expect to accelerate market access across Africa by combining Deltamune’s customer base and diagnostic strengths with Vaxxinova’s global R&D and product pipeline.

Local fintech startup Stitch has acquired digital payments company Efficacy Payments. The acquisition is the second transaction for Stitch in the past six months, following the acquisition of ExitPay earlier this year. The deal will enable Stitch to offer card acquiring services directly to merchants as a Designated Clearing System Participant, providing more seamless and cost-effective transactions. Financial details were not disclosed.

Global investment firm Carlyle will, through its sub-Saharan Africa Fund, dispose of Safety SA, a local independent TICT platform serving Africa and the Middle East and focused on food and workplace safety. Safety SA, acquired by Carlyle in 2018 will now be acquired by Centre Testing International Group, a third-party testing, inspection and certification company based in China. Financial details were not disclosed.

Pinewood Technologies Group PLC, a pure-play cloud-based software business providing innovative retail solutions to the automotive industry, will acquire, via its wholly-owned South African subsidiary, key assets such as customer contracts relating to the software-as-a-service business offering known as the Pinewood Dealer Management System from certain entities within the Motify Group for a total cash consideration of £2,5 million. The proposed acquisition will enable Pinewood.AI to fully control its sales and customer service functions in its markets in Southern Africa.

ONE Property Holdings, a boutique real estate brokerage firm catering to the high end and luxury real estate markets in South Africa, has transferred six established retail shopping centres to Enyuka Prop Holdings, a dedicated retail property fund co-owned by ONE Property, Mpande Property Fund and Trinitas Private Equity. The transaction increases the fund’s gross asset value from R1,8 billion to R3,5 billion making it a significant player in the unlisted retail real estate funds. The transaction was enabled by R2,1 billion in debt financing from a syndicate of financial institutions.

DealMakers is SA’s quarterly M&A publication.
www.dealmakerssouthafrica.com

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
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Weekly corporate finance activity by SA exchange-listed companies

enX has declared a special distribution of R1.30 to shareholders, its second this year. In March, the company paid a special distribution of R1.55 from proceeds of sale of Centlube, Zestcor and Ingwe.

MTN Zakhele Futhi has approved a gross cash distribution to shareholders by way of a return of contributed tax capital from income reserves of R20.00 per share. The distribution of c.R2,47 billion will be made on 28 July 2025.

Orion Minerals has announced its intention to raise A$9,8 million, via the issue of $5,8 million worth of new shares. New shares valued at $3,3 million will be placed with select investors while a further $0,5 million would go to Tarney Holdings, with the remaining $2,1 million worth of new shares taken up by Ratel Growth. The company also proposes to offer a share purchase plan to existing shareholders of Orion to increase their stake in the company by up to $30,000, in a bid to raise up to $4 million. The capital raised will be used to fund working capital to support the Prieska Copper Zinc Mine and Okiep Copper Project developments.

The JSE has advised that the listing of Rebosis Property Fund will be removed from the bourse on 21 July 2025 following the failure by the company to remedy the various non-compliances since its suspension in August 2022. Shareholders are warned that they will remain invested in an unlisted company with the last day to trade (off-market) being 15 July 2025.

This week the following companies announced the repurchase of shares:

In May 2025 Tharisa plc announced it would undertake a repurchase programme of up to US$5 million. Shares have been trading at a significant discount, having been negatively impacted by the global commodity pricing environment, geo-political events and market volatility. Over the period 27 June to 4 July 2025, the company repurchased 75,505 shares at an average price of R20.7391 on the JSE and 315,453 shares at 86 pence per share on the LSE.

Glencore plc will undertake a further share buy-back programme to acquire shares of an aggregate value of up to US$1 billion. The shares will be repurchased on the LSE, BATS, Chi-X and Aquis exchanges and is expected to be completed in February 2026. This week 2,700,000 shares were repurchased at an average price of £3.01 per share for an aggregate £8,13 million.

Pan African Resources has commenced the share buyback programme announced in early June 2025. The programme will take place on the AIM Market of the LSE and the JSE with c.R200 million (c.£8,2 million) to be purchased across both exchanges. This week 1,183,418 shares were repurchased at an average price of 48 pence per share for an aggregate £650,973.

Hammerson plc continued with its programme to purchase its ordinary shares up to a maximum consideration of £140 million. The sole purpose of the buyback programme is to reduce the company’s share capital. This week the company repurchased 204,098 shares at an average price per share of 294 pence for an aggregate £599,887.

In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is to be funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 714,678 shares at an average price of £35.52 per share for an aggregate £22,41 million.

During the period 30 June to 4 July 2025, Prosus repurchased a further 2,272,998 Prosus shares for an aggregate €106,58 million and Naspers, a further 206,733 Naspers shares for a total consideration of R1,13 billion.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Who’s doing what in the African M&A and debt financing space?

Vanessa Aitken
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Who’s doing what in the African M&A and debt financing space?

DealMakers AFRICA

Development Partners International and some co-investors, have signed a binding agreement to acquire a minority stake in Egyptian healthcare group Alameda Healthcare. The deal is valued at US$190 million. The funding will be used for expansion within Egypt as well as across the Gulf Cooperation Council region. Established in 1999, Alameda Healthcare operates a range of services across the healthcare sector.

Nigerian crypto startup Roqqu has acquired Fitaa, another crypto exchange with operations in Nigeria and Kenya. The financial terms of the all-cash deal were not disclosed. The deal marks Roqqu’s entry into the East Africa digital asset market.

Nawy, an Egyptian proptech, has acquired a majority stake in Dubai-based SmartCrowd, a DFSA-regulated platform that enables fractional property investment in the region. The expansion follows Nawy’s recent US$52 million Series A fundraise in May. Earlier this year, Nawy acquired asset management and home finishing startup ROA, relaunching it as Nawy Unlocked.

Equatorial Coca-Cola Bottling Company (ECCBC) and Coca-Cola Beverages Africa (CCBA) have reached an agreement which will see ECCBC acquire Voltic (GH) Limited and West African Refreshments Limited (WARL). Voltic is a subsidiary of CCBA and WARL is a subsidiary of CCBA and of The Coca-Cola Company (TCCC). Financial terms were not disclosed.

Guaranty Trust Holding Company began trading on the London Stock Exchange on 9 July 2025. The company cancelled its GDR’s listing and concurrently launched a US$105 million equity offering at a reference price of ₦70.00 each.

South African headquartered Stefanutti Stocks (SSH) has terminated the 2022 agreement it signed with Mauritian CCG-Compass Consulting Group to sell its businesses in Mozambique and Mauritius. As part of the restructuring plan agreed to by the Board and lenders, SSH has entered into an agreement with East Africa Enterprises, a privately owned business established in the Dubai Multi Commodities Centre Authority. SSH will receive an aggregate of US$3,9 million for the businesses with $700,000 payable for the Mauritian entity and a total of $3,2 million for the Mozambique subsidiary. The proceeds, payable by 31 December 2025, will be used to reduce the current funding facilities.

Chariot Corporation announced it has entered into a binding share sale agreement to acquire a 66.7% interest in a portfolio of Nigerian hard-rock lithium projects from Continental Lithium. The portfolio comprises four project clusters—Fonlo, Gbugbu, Iganna, and Saki—located across Nigeria’s Oyo and Kwara States, and includes eight Exploration Licences and two SmallScale Mining Leases (SSMLs). These licences will be transferred to a newly established joint venture entity, C&C Minerals, which will be 66.7% owned and controlled by Chariot. Continental will hold the remaining 33.3% interest. Chariot will make a total cash payment of US$1,5 million and issue 42 million shares in consideration.

DealMakers AFRICA is the continent’s quarterly M&A publication
www.dealmakersafrica.com

The evolving landscape of South African financial services M&A

Calvin Chellan
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The evolving landscape of South African financial services M&A

The South African financial services sector is undergoing a structural realignment. Increased competition, margin compression, rising compliance costs, digital disruption, and shifts in capital allocation are forcing incumbents to rethink their business models. In this context, M&A has become a strategic tool not just to achieve scale, but to reposition portfolios, unlock capital efficiency, and acquire capabilities that cannot be built in-house at speed.

Over the past year, RMB Corporate Finance has advised on a number of high-impact transactions that exemplify this strategic pivot. While the various deals have different specifics, they collectively signal a sector in motion. As M&A activity intensifies, we see five themes shaping financial services transactions in the current market and how they are being structured, priced and executed:

Scarcity of quality assets driving premiums

The supply of high-quality, scalable financial services assets remains limited. Businesses with robust regulatory and compliance track records, strong distribution channels and resilient earnings are commanding premium valuations. With multiple bidders circling a limited universe of quality assets, competitive tension is high, and sellers with a clearly articulated growth story, defined upside potential and regulatory preparedness are seeing meaningful valuation uplifts. On the other side, buyers are increasingly differentiating on speed, regulatory readiness and integration capability.

Strategic partnerships on the rise and sometimes the preferred growth plan

Firms are increasingly looking beyond traditional M&A to build partnerships, especially with players in telecoms, retail and fintech. These alliances are helping to broaden distribution, reach underserved segments, and tap into new tech capabilities. Cross-border joint ventures are also gaining momentum to enter new markets without taking on the full cost and risk of acquisition. The ability to structure win-win partnerships, blending regulatory clarity with customer access, is fast becoming a strategic differentiator.

Regulatory considerations front and centre

The regulatory environment has become a central pillar in deal strategy. Authorities are playing a more active role in transaction approvals, with increased focus on competition, financial stability, transformation and consumer outcomes. As a result, early and proactive regulatory engagement is now a critical determinant of deal feasibility and timeline certainty. Regulatory strategy is being embedded earlier in transaction planning, rather than treated as a down-stream approval process.

Capital recycling driving deal flow

With capital frameworks tightening and return thresholds rising, institutions are increasingly recycling capital to fund growth. Excess capital or proceeds from the disposal of non-core assets or legacy operations are being redeployed into higher-growth or capital-light businesses. At the same time, buyers are looking for acquisitions that deliver capital uplift, whether through balance sheet efficiency, margin accretion or earnings diversification.

This capital-aware approach is influencing both deal appetite and transaction structuring. Boards are placing more weight on capital impact and post-deal metrics, and the ability to deliver strategic fit and capital efficiency is now central to deal approval.

Due diligence under pressure

The technical complexity of financial services assets, especially in areas like compliance, technology integration and regulated activities, means execution risk is real. Buyers are under pressure to run diligence in parallel, not sequentially, and to get to conviction quickly. Delays in surfacing key issues are leading to pricing uncertainty or missed opportunities. Successful acquirers are front-loading third-party diligence, building execution muscle internally, and using deep sector insight to filter risk early. In a market where speed often equals certainty, the ability to transact decisively has become a competitive advantage. Delay in confirming key risks or value drivers materially increases the risk of missed windows or pricing renegotiations.

Looking ahead

M&A will remain a central lever for strategic repositioning in South Africa’s financial services sector. Regional banks and insurers will continue to look outward, while domestic players will focus on refining business models and rebalancing portfolios in line with capital efficiency and regulatory direction. The next wave of successful deals will be those that combine strategic clarity, capital discipline and regulatory foresight.

Calvin Chellan is a Corporate Finance Transactor | RMB

This article first appeared in DealMakers, SA’s quarterly M&A publication.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Ghost Bites (MAS | Renergen | Stefanutti Stocks | Tharisa)

The Finance Ghost
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Ghost Bites (MAS | Renergen | Stefanutti Stocks | Tharisa)

A group of asset managers also call a special shareholders meeting at MAS (JSE: MAS)

And still Hyprop is nowhere to be seen

The interesting corporate finance games at MAS continue.

With Prime Kapital having called a shareholders meeting that will be held this Friday (11th July), a group of asset managers (Meago / Sesfikile Capital / Ninety One / MandG / Catalyst / Eskom Pension Fund / Stanlib / Mazi Capital / Momentum) have now done the same thing. Collectively, they hold in excess of 15% of the voting rights in the company, hence they can call such a meeting (just like Prime Kapital did). They make it clear that they are not acting as concert parties here.

While Prime Kapital is looking for shareholders to support a value unlock through an orderly sale of assets by the fund, these investment managers are worried about something else: corporate governance. They feel that the MAS board has been sitting on the fence, being a “conduit to market for dissemination of communications received by it” – a rather spicy but pretty accurate statement.

They don’t like the fact that Mihail Vasilescu is a director of MAS, as he has interests in Prime Kapital. They are also concerned about the perceived independence of Dan Pascariu, giving the long relationship with key players at Prime Kapital. They want both Vasilescu and Pascariu to leave the board, while proposing four candidates to be appointed to the board.

Another bone of contention is alleged poor disclosure around the joint venture agreement, the summary of which only recently came to light. The shareholders are specifically irritated by the development margin and the fixed dividend, terms that change the economics of the joint venture vs. how they originally understood it. There’s also an allegation that the joint venture made investments in listed securities at least once, something that wasn’t disclosed. Of course, the joint venture also bought many MAS shares (which is how we got here in the first place), suggesting a wider investment mandate than the investment community initially understood.

The most serious allegation, in my opinion, is the lack of disclosure of obviously critical terms in the joint venture. That’s going to be difficult for the board to defend.

There are a lot of questions being posed to the board. The shareholders have suggested that a board committee be established with the authority to respond to these queries. They have also proposed resolutions to remove Vasilescu and Pascariu from the board.

And…drumroll please…here are the four names of directors they have put forward for appointment: Des de Beer (one of the best-known names in property – and of course, a regular buyer of Lighthouse shares, as Ghost Mail readers know), Robert Emslie (highly experienced director with banking credentials), Sundeep Naran (also a strong ex-banking background, particularly in investment banking) and Stephen Delport (founder of Lighthouse Properties and its ex-CEO).

The troops are being called in, that’s for sure. All eyes now turn to the shareholders meeting on Friday and how that vote ends up going.

At this stage, it feels like Hyprop will be sitting on the blank cheque that the market somehow gave them for at least a few months before any kind of offer becomes viable. As a shareholder in Hyprop, that opportunistic capital raise and the related cash drag continues to irritate me.

Never a dull moment at Renergen (JSE: REN)

Mahlako Gas Energy wants their shares in Tetra4 to be repurchased

Just when you thought it was safe to go outside and believe that the weird stuff was over at Renergen, here’s something fresh to consider. Thankfully, it doesn’t appear to have any impact on the deal with ASP Isotopes, so the market hasn’t panicked. Still, there’s another legal distraction for Renergen at a time when they really need to be focusing on getting helium out of the ground.

The issue relates to Mahlako Gas Energy exercising a put option in relation to its stake in Tetra4, the Renergen subsidiary that houses the South African assets (and hence the only subsidiary that matters at the moment). Although the announcement is light on specifics, Mahlako Gas Energy believes that a put option event has occurred and that this entitles them to exercise the option. Renergen disputes this of course. On top of that, they even dispute whether the option transaction agreement (to which they are presumably a party) validly came into existence!

Sigh. It’s never boring at Renergen, that’s for sure.

Whatever the outcome here, it won’t be a quick process. There are dispute resolution mechanisms in place and if this does go to court, it will no doubt take years. Renergen won’t want to part with any cash to buy out a shareholder at this stage, unless it’s at a price so favourable that it wouldn’t have made sense anyway for the put option to be exercised by said shareholder.

Stefanutti Stocks enters into a new deal to sell the Mozambique and Mauritius subsidiaries (JSE: SSK)

The 2022 deal has been terminated

For a long time now, we’ve been reading updates from Stefanutti Stocks about delays in the disposal of SS – Construções (Moçambique), Limitada (SS Mozambique) and Stefanutti Stocks Construction in Mauritius (SS Construction). That deal is now dead. The good news is that there’s a deal to replace it.

The counterparty is East Africa Enterprises, an entity incorporated by the Dubai Multi Commodities Centre Authority. In other words, this is investment from the Middle East in Africa. Stefanutti Stocks will sell SS Construction for $700k, with the price payable by the end of December 2025. SS Mozambique will be sold for a total of $3.2 million, also payable by the end of December 2025. There’s some other cleaning up of balances as well, but that’s the meat of the deal from an equity perspective.

The repayments of loans is more interesting, with the purchaser extending $3.5 million to SS Mozambique for working capital purposes and further loans of $6.1 million in various tranches before the end of December. The $6.1 million is for the purposes of repaying a loan of R113.2 million from Stefanutti Stocks.

Although you would imagine that this is very good news (even though there are various conditions to the deal), the share price closed flat for the day! The joys of illiquidity.

PGM and chrome production up sequentially at Tharisa (JSE: THA)

It’s platinum’s time to shine – and they need to get the stuff out the ground

Tharisa’s share price is up 28% year-to-date, boosted by the recent platinum rally. As there is significant chrome exposure as well, they haven’t flown to the moon quite like some of the pure-play options in platinum (for context, Northam Platinum has nearly doubled). Diversification reduces risk and also tempers overall potential returns. Such is the world of finance.

Like all mining companies, the focus at Tharisa is on getting the commodities out of the ground. PGM production increased 6.2% quarter-on-quarter (i.e. Q3 vs. Q2 or what is referred to as a sequential view), while chrome was up 3.9%.

The recent rally in the sector can only be helping with discussions in the market around the funding of the Karo Platinum project. Although it’s extremely difficult to forecast long-term prices and thus the expected returns on such a project, it’s certainly even harder to convince investors to care about exploration and development when commodity prices are depressed.

This apathy is precisely why those prices eventually rally, based on lack of supply and an uptick in demand.

Speaking of development, it’s been a quarter of significant cash outflow at the group. Net cash is down from $79.3 million to $29.4 million based on project and working capital outflows.

Unfortunately, due to various production issues this year, they are still running below full-year guidance. They’ve taken 5% off the lower end of guidance for the year. It’s frustrating for investors in terms of what might have been, but that’s also why a diversified basket of miners is usually a lot smarter than just owning one. There are too many unpredictable elements in mining – including the elements themselves, as rainfall is a major factor!

Nibbles:

  • Director dealings:
    • In what has to go down as one of the smallest stock purchases by Christo Wiese, he bought R27.8k worth of shares in Brait (JSE: BAT) through Titan Premier Investments. They’ve must’ve found some coins in the couch.
  • enX (JSE: ENX) has declared a chunky special dividend of R1.30 per share. With the share price closing at R4.79 on Wednesday, that’s a significant portion of the total market cap. This comes after a number of divestments and what is now a cash balance far in excess of requirements. As one hopes to see in terms of capital allocation discipline, they are returning the cash to shareholders instead of chasing after unnecessary or marginal deals.
  • There’s a change in management at Nedbank (JSE: NED), with Andiswa Bata appointed as Managing Executive of Nedbank Business and Commercial Banking (BCB). I must say, this structure makes much more sense to me than the old structure that had various people falling over one other to service smaller business clients. The BCB cluster will look after SME, commercial and what they call mid-corp clients, with the much larger clients being serviced on the Corporate and Investment Banking (CIB) side. Bata was most recently the CEO of the Business segment at FNB, so this is a solid external appointment. Nedbank has been bringing in a lot of new blood and fresh ideas from competing banks, not least of all Jason Quinn in the CEO role.
  • Here’s something you won’t see every day: after Metrofile (JSE: MFL) announced that Bradley Swanepoel would be coming in as the new CFO, they’ve now backtracked on that. The parties have “mutually agreed” (I’m sure it was exactly 50-50 – not) that Swanepoel will no longer be appointed as CFO. These things are NEVER truly mutual. For whatever reason, one of the parties surely had a change of heart and then the conversations began about what to do. Shivan Mansing will continue in the dual role of group CFO and Managing Director of Metrofile Records Management South Africa for now.
  • Super Group (JSE: SPG) announced that S&P has affirmed the company’s credit ratings as zaAAA (long-term) and zaA-1+ (short-term) after the disposal of SG Fleet Group. This is important for keeping the company’s borrowing costs at appealing levels.

Ghost Bites (Orion Minerals | Prosus | Vodacom – Remgro)

The Finance Ghost
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Ghost Bites (Orion Minerals | Prosus | Vodacom – Remgro)

Orion Minerals raises at least R37 million in cash as part of a larger equity raise (JSE: ORN)

If the share purchase plan goes well, it could be a lot higher

Orion Minerals has announced the issue of 522 million shares at R0.13 per share (roughly the current traded price), thereby raising around R67 million in equity.

They’ve managed this by achieving commitments from sophisticated and professional investors in the market who signed up for R37 million, with this amount flowing into the group as a cash raise. To further improve the balance sheet, entities related to current and prior management have agreed to convert R30 million in loans into shares.

As the icing on the cake, Orion will offer a share purchase plan to shareholders, giving them the opportunity to subscribe for up to R355k in shares per shareholder, with a potential raise of up to R46 million. I appreciate the commitment that Orion has shown to retail investors here, as most companies just raise from institutions in fancy boardroom deals and leave the average shareholder out in the cold, aside from rare examples where rights issues are necessary. This combination of an institutional raise and a share purchase plan is exactly what companies should always do.

Please note that the share purchase plan is only available to shareholders who were already on the register as at 7 July.

Orion will use the proceeds to fund the development at Prieska Copper Zinc Mine and Okiep Copper Project, as well as the usual catch-all of “general working capital purposes” at the group.

Prosus is having no trouble in attracting capital (JSE: PRX)

This is what happens when a group stops eating cash

The major highlight of the recent financial performance at Prosus is that they are no longer free cash flow negative in their operations excluding Tencent. If you know the history of the group, you’ll know that this is a big deal.

This does wonders for the balance sheet. Although Prosus has plenty of long-dated debt that doesn’t need to be refinanced yet, having strong ongoing support from the debt market is important for a group of this size.

Prosus has priced €750 million in notes due 2035. This will refinance the notes that matured in 2025, as well as €500 million worth of notes maturing in January 2026. The bonds were priced at 4.343% and were more than four times oversubscribed by investors, so there’s no shortage of interest from investors wanting to earn interest from Prosus.

Prosus is rated BBB with a stable outlook by S&P and Baa2 with a stable outlook by Moody’s. This means that the bonds are investment grade with a moderate level of risk. As Prosus keeps derisking its business, its credit rating should hopefully improve and the cost of borrowing will come down. I think we are some way off that, but the direction of travel is clear.

Finally, the Dark Fibre deal can step into the light for Vodacom and Remgro (JSE: VOD | JSE: REM)

The negotiations with the Competition Commission have paid off

After many, many, many extensions to the long-stop date for the transaction that would see Vodacom and Remgro combine their fibre assets into an exciting new venture, there’s finally success.

The Competition Commission initially blocked the deal in a move that received no shortage of valid criticism. Since then, the parties have been trying to agree a set of transaction conditions that would please the Commission. I look forward to those conditions coming to light, as I have my suspicions that the term “public interest” is working very hard once more to mean Black Ownership under B-BBEE rules rather than stuff like access to internet in low income areas. Perhaps I’ll be pleasantly surprised, but I doubt it. For whatever reason, the Competition Commission sees itself as the B-BBEE implementation arm of government.

With this deal now going to the Competition Appeals Court on an unopposed basis, Vodacom and Remgro will soon have the fibre assets of CIVH (including Vumatel and Dark Fibre) and of Vodacom in the same entity, namely Maziv. Vodacom will have a 30% stake in that entity.

There isn’t much growth in traditional cellphone services in South Africa, so this fibre deal is very important for Vodacom in particular.

Nibbles:

  • Director dealings:
    • In addition to a reshuffling of the structure through which he holds his shares, a director of a major subsidiary of PBT Group (JSE: PBG) bought additional shares worth R36k.
  • Datatec (JSE: DTC) is busy with a scrip dividend alternative to the cash dividend of 200 cents per share. If shareholders want, they can elect to receive 3.21027 shares for each Datatec share held. This is calculated based on the 30-day VWAP, less the dividend.
  • Castleview (JSE: CVW) is also busy with a dividend reinvestment alternative, but they’ve decided to price it at R9.53540, which is the net asset value (NAV) per share. The stock never trades as it is so tightly held, but the last available price was R8.20. As it’s impossible to buy more shares on the market, any investors looking to increase their stake will need to pay the NAV per share.

Ghost Bites (Assura – Primary Health Properties | South32)

The Finance Ghost
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Ghost Bites (Assura – Primary Health Properties | South32)

Assura shareholders aren’t exactly rushing to accept the Primary Health Properties offer (JSE: AHR | JSE: PHP)

Perhaps I was right about the cash offer being far more attractive?

The Assura – Primary Health Properties deal is far from done. I wasn’t surprised at all to see strong support from the Primary Health shareholders, as it’s a good deal for them. As for Assura shareholders, they seem to be a lot more cautious in signing up for a merger. Again, I don’t blame them. I genuinely think that the Assura board backed the wrong deal here, as cash alternatives are just so much cleaner – even if the price is slightly lower.

There’s a long way to go still, with the offer open until 12 August. As things stand, valid acceptances for just 1.14% of Assura shares have been received by Primary Health. Perhaps there will be a surge in acceptances. And perhaps there won’t…

To help with trying to convince Assura shareholders to say yes, Primary Health released a trading and financial update for the six months to June 2025. The update takes the opportunity to remind Assura shareholders that the deal would create a UK REIT with a combined portfolio of roughly £6 billion of assets, with the tenants generally being in the public sector in the UK. The public sector vs. private sector debate has been a feature of this deal, with the plan being for the merged entity to have 80% to 90% government-backed income, while the private sector assets are sold off into a joint venture.

As for the numbers, the six months to June 2025 saw a 3.1% increase in net rental income and a 2.9% increase in the dividend per share. When you’re dealing with a risk profile like government tenants in the UK, you’re looking for dependability of income rather than growth. This also allows them to run at quite a spicy loan-to-value ratio, currently at 48.6%.

I’m really looking forward to seeing how the latter stages of the offer period play out. It’s been a fascinating deal to follow.

South32 offloads their nickel asset in Colombia (JSE: S32)

And they are happy to just get paid something in the future

The nickel market hasn’t been a happy place. This is a classic situation of oversupply, with too much investment in this metal in anticipation of electric vehicle demand that hasn’t materialised. This results in depressed nickel prices and a reduction in supply until equilibrium is reached.

South32 isn’t hanging around for that, with a decision to sell Cerro Matoso in Colombia to CoreX Holding. The upfront price is nominal, with South32 just happy to be rid of the current and future liabilities. There is an “agterskot” though (as we like to call it in South Africa), in the form of potential future payments of up to $100 million.

Up to $80 million relates to price-linked consideration based on future production and nickel prices, while up to $20 million is based on permitting milestones within the next five years for the Queresas & Porvenir North project.

Sometimes, you just need to walk away and cut your losses. South32 will have to recognise an impairment expense of $130 million as this asset is shifted off the balance sheet.

Nibbles:

  • Director dealings:
    • Sean Riskowitz has bought shares in Finbond (JSE: FGL) worth R433k.
  • MTN Zakhele Futhi (JSE: MTNZF) is in the process of being wound up and returning value to shareholders, all thanks to the recent strength in the MTN share price that gave them this opportunity. The latest step is the declaration of a special distribution by way of return of contributed tax capital of R20.00 per share.
  • Glencore (JSE: GLN) is commencing a share buyback programme of up to $1 billion, with a plan to complete this programme by February 2026. UBS in London has been appointed to manage the process. For context, much as that sounds very large and impressive, Glencore’s market cap is R955 billion. This programme is therefore roughly 2% of issued share capital.
  • Old Mutual (JSE: OMU) announced the appointment of Prabashni Moodley as the CEO of the new Life and Savings segment. Under this segment, you’ll find Personal Finance, Old Mutual Wealth Management, Old Mutual Corporate and the Mass and Foundation Cluster. Moodley has been with Old Mutual since 2002 and is currently the Management Director of Old Mutual Corporate. Will this new structure help Old Mutual close the gap to a peer like Sanlam? Over five years, Old Mutual is down 4% and Sanlam is up 43%!
  • Accelerate Property Fund (JSE: APF) has been granted an extension by the JSE for the issuing of the circular for the sale of Portside. The extension gives them until 31 July.
  • Trustco (JSE: TTO) still hasn’t released financials for the year ended August 2024. They are currently waiting for a ruling from the JSE, so there’s no indication of when they will finally be released.
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