- Santam has released an update for the four months ended April 2022. Premiums are up, underwriting margins are down and investment returns have taken a knock. There’s much to learn about the insurance industry from this feature article.
- Tradehold has concluded an agreement to sell its shareholding and claims in Moorgarth Holdings to Moorgarth Group Holdings, the holding company of all the interests in the UK. This is a related party deal worth GBP102.5 million. Major shareholders of Tradehold with a total stake of 67.2% in the company cannot vote on the deal, as they are also shareholders of the purchaser and are thus conflicted. The legal term is that a majority of “disinterested shareholders” need to approve the deal, which is a nod to their lack of conflict rather than their lack of concentration at the meeting. An independent expert has been hired to opine on the fairness of the transaction, which is particularly important as the sales price appears to be well below the value recognised in Tradehold’s books (GBP149 million).
- Property fund Fairvest has released interim results for the six months ended March 2022. Due to the recent merger with Arrowhead, the comparability of the accounts with the prior period is severely impacted. Investors should note that Fairvest also holds a 61% stake in Indluplace Properties and an 8.6% interest in Dipula Income Fund. Fairvest has a dual-share structure and has declared dividends of 61.52 cents and 21.33 cents for the A and B shares respectively. This is a 4.3% yield on the A shares and a 6.5% yield on the B shares. The A shares are trading at a 4% discount to net asset value (NAV) per share and the B shares are trading at a 33% discount to NAV per share.
- Labat Africa announced in December 2021 that it had signed a put option agreement that would allow it to raise R300 million in capital over the next 36 months from GR Global Ventures LLC, an investment group based in the US. There have been delays in implementing the deal as Labat navigates the JSE requirements for a deal like this. As soon as these hurdles are cleared, Labat wants to exercise the put option on between 14 million and 28 million shares, which means issuing those shares at the price in the option agreement – a premium of 120% to the current price. This would raise between R3.7 million and R7.4 million by my rough calculations. The proceeds will be used to expand the Sweetwaters operation in the Eastern Cape, part of the strategy for international offtake of pharmaceutical grade cannabis.
- There’s an update from Ascendis. In stark contrast to the usual newsflow from the company, it’s a bit, well, normal? The sale of Amka Products (the Nimue business) has been implemented and the proceeds will reduce the debt owed to Austell Pharmaceuticals. Ascendis needs to distribute a circular to its shareholders regarding other transactions and was supposed to do so by 31 May 2022. With recent changes to the board and the lenders, this simply hasn’t been possible. The JSE has granted a dispensation and the circular is expected to be distributed by the end of June.
- BHP Group has completed its merger with Woodside Energy Group. In this deal, BHP sold BHP Petroleum to Woodside and received shares in Woodside as payment. These shares are being distributed to shareholders in other jurisdictions, as Australian business Woodside will be listing in London as part of the deal. South African shareholders will be paid out in cash (BHP will sell the shares on behalf of local shareholders) unless they elected to receive the shares and followed the required process with the SARB. I remain annoyed that the enlarged Woodside business won’t be listing on the JSE.
- Back in February, Libstar shareholders rejoiced at the news that an acquirer would be taking a controlling stake in the household and personal care business, leaving the group to focus on the food business. Sadly, the deal has fallen through. On the plus side, Libstar has highlighted that this segment delivered an improved operating result in the first four months of this financial year vs. the comparable period. Libstar is down more than 22% this year.
- Mantengu Mining has released a trading statement for the year ended February 2022. The headline loss per share will be between 89.30 and 92.80 cents and I’m not sure that this is directly comparable to the prior year due to a significant restructure.
- Investors in Purple Group will know that Mark Barnes has been a seller of the shares in recent times, which has been an ongoing awkward discussion point for the company as substantial growth is being promised. The latest update is that Barnes has sold R40.5 million worth of shares in Purple, with a note that he is “diversifying his personal portfolio” – which makes sense. The share price has been incredibly volatile this year and is down around 15% this year. It’s been a fun opportunity for traders, with a massive support level at around R2.30.
- Spear REIT has withdrawn the ability for shareholders to choose to reinvest their dividends rather than receive the cash. This means that the Spear distribution will be paid out in cash.
