Exchange-Listed Companies
In May 2022 Sanlam and Allianz announced a joint venture (SanlamAllianz) to house the merger of their African operations – Sanlam’s South African and Namibian subsidiaries were excluded. Sanlam and Allianz agreed on an initial shareholding split of 60:40, subject to post-closing adjustments and the inclusion of the Namibian operations. Sanlam has now integrated its Namibian business into SanlamAllianz, as reported in its interim results released this week, at an initial valuation of R6,2 billion. To maintain the split following the incorporation of the Namibian operations, for which it will receive a cash consideration of R2,5 billion, Sanlam will subscribe for additional shares in the joint venture. Allianz retains the option to raise its stake in SanlamAllianz to 49% within six months of the completion of the Namibian transaction.
In another corporate action Sanlam subsidiary Sanlam Life will acquire a 25% interest in African Rainbow Capital Financial Services (ARC FSH) for a cash consideration of R2,41 billion. The deal with ARC FSH, the investment holding company for all the financial services investments of the Ubuntu-Botho Investments Group and Sanlam’s strategic empowerment partner, will see Sanlam Life dispose of its 25% interest in ARC Financial Services Investments in exchange for the issue by ARC FSH of shares to the value of R1,49 billion. Sanlam will subscribe for further ARC FSH shares valued at R92 million in cash making up the 25% stake. Sanlam will pay African Rainbow Capital an outperformance fee based on the extent to which the value of ARC FSH’s investment in Tyme Investments Pte (Asia), as at 30 June 2028, exceeds an annual hurdle rate of 14.64%. This is capped at R70 million.
Pepkor has entered into an agreement with Shoprite to acquire Shoprite’s furniture business operating more than 400 stores in South Africa, Botswana, Lesotho, Namibia, Eswatini and Zambia. The stores will be combined with Pepkor Lifestyle (previously JD Group) which operates 900 stores in the same countries (except Zambia). The proposed transaction includes the Shoprite Furniture credit loan book and related insurance cell captive agreements as well as the OK Furniture and House & Home retail brands. The deal will enable key synergies and efficiencies to be unlocked within the supply chain, logistics and financial services operations. The purchase consideration which will be determined at the close date of the transaction represents c. 4% (c.R3 billion) of Pepkor’s market capitalisation and will be settled in cash.
Earlier in March this year, Takealot, Naspers’ e-commerce business in South Africa, announced it was looking to offload its fashion retailer Superbalist amid growing concerns of increased competition from Shein and Temu. This week Takealot sold the business to a consortium of retail and private equity investors led by Blank Canvas Capital for an undisclosed sum. The deal will support Suberbalist’s ongoing growth while allowing the group to focus efforts on expanding Takealot and Mr D. Takealot will however, continue to provide warehousing and logistics services to Superbalist through a multi-year service agreement.
Burstone has entered a strategic partnership in Europe with Blackstone, an American alternative investment management company which will see a scaling of the group’s international fund and investment management strategy. Blackstone will acquire, at a 3.1% discount to gross asset value (11.7% discount to NAV), an 80% stake in Burstone’s pan-European Logistics platform for a €1,02 billion (R20 billion) purchase consideration. Burstone will reduce its stake by 63% (valued at €644m/R12,69 billion), retaining a 20% stake and will continue to manage the portfolio. The balance of 17% will be acquired from unrelated parties. Together the groups will expand the portfolio, targeting industrial and logistics properties across Europe. In addition, Burstone’s Australian Irongate joint venture has announced a new industrial joint venture in Queensland with a global alternative asset management firm (the name of which was not disclosed) backed by an initial A$200 million (R2,4 billion) equity commitment. Burstone is also currently negotiating to acquire a 25% co-investment stake in a €170 million (R3,4 billion) German light industrial platform. Post the successful implementation of these transactions, Burstone’s assets under management are expected to increase 32% and its loan-to-value ratio decrease 12.5% to 33.5%. Burstone will also increase its dividend payout ratio from 75% to between 85% and 90%.
The SPAR will exit the loss-making Polish business, the assets of which include 200 retail stores, three distribution centres and one production facility. The exit will be at great expense to the company, which will recapitalise operations at a cost of R2,7billion (c.12% of Spar’s current market capitalisation), the majority of which will be for the settling of funding debt. The buyer, Specjal, a Polish retailer is, according to the company statement, better placed to turn the business around and will pay Spar R185 million for the assets.
Nampak has disposed of the businesses of manufacturing, selling and supplying of plastic drums and of HDPE and PET bottles and jars. The disposal of the Drums Business and Liquid Business is in line with the implementation of Nampak’s asset disposal plan announced in August 2023. Financial details of the transactions were not disclosed.
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