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Nico Katzke | What we get wrong about bubbles

Nico Katzke, Head of Portfolio Solutions at Satrix
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Nico Katzke | What we get wrong about bubbles

There is growing talk in investment markets that the AI “bubble” may soon burst. However, evidence suggests those predictions are misplaced, although investors should remain cautious about risks.

In market terms, a bubble refers to irrational pricing. It happens when hype overshadows reason. Prices reflect investors’ urgency to buy because they fear missing out. This hype drives prices even higher, reinforcing positive sentiment in a self-perpetuating loop. Bubbles occur when asset prices far exceed sustainable value. Previous examples include tulip prices in the 1600s and tech stocks in the early 2000s.

Some analysts believe this is now happening with artificial intelligence (AI) shares. I am not convinced – as it is hard to foresee a world where AI becomes less relevant in our daily lives.

There have been many examples where analysts suggested stocks were irrationally overbought for years until they accepted higher prices as normal – think Naspers or Capitec a decade ago. Often in those periods analysts fail to appreciate that the market valued a stock or sector based on future potential earnings that had not yet materialised. Mr Market is, by and large, remarkably efficient at pricing assets and predicting trends.

The 2000 dot-com crash serves as a lesson from the past that informs the current market. In the early 2000s, there were naysayers who wrote the obituary for a tech industry that – at the time – looked like it had died before it had even matured. A few analysts were saying, “We told you so. This was all hype, all bubble, no substance.” But hindsight shows us that the market was not irrational in valuing highly the companies that would ultimately benefit from widespread Internet adoption.

Instead, the dot-com crash was simply a case of not all tech companies becoming winners. There’s a lesson there for today’s AI companies and today’s investors.

Markets tend to be remarkably resilient and efficient over time. The dot-com crash simply preceded an era of enormous stock market growth. Many of the companies that succeeded in the Internet age drove this. Were there failures? Of course. After the correction, many analysts pointed to the irrational behaviour of companies that were too eager to build the Internet’s infrastructure. This included laying the same fragile fibre-optic undersea cables that now enable our global connectivity. At the time, that infrastructure investment might have looked excessive. In hindsight, it proved essential. The rapid growth of AI may follow a similar path, but unlike the early internet, it will depend heavily on the infrastructure required to support it at scale. 

The long-term market correction that followed the 2000s dot-com bubble highlighted the importance of staying calm and avoiding panic selling. It also showed why a diversified and disciplined risk management approach will always beat jumping onto investment bandwagons or trying to “time the market”.

Investors should be cautious yet open-minded about the current AI bull run. Will there be pain from AI? Yes. Some companies will disappoint. Are valuations stretched? I would agree, but traditional accounting isn’t great at measuring technology company value.

Like AI, other assets – such as cryptocurrencies and commodities – also face “bubble” warnings. But labelling everything a bubble is not helpful. It simply creates fear among investors. They then see those industries or stocks as irrationally priced. This affects their behaviour, and so they stay on the sidelines.

Unsurprisingly, bubbles and subsequent busts get a bad rap. But arguably the optimal amount of bubbles and busts over time is not zero. Society needs them to occur. If you consider truly societal game-changing technologies – railways, air travel, the Internet – it’s clear that we need periods where people lose their short-term sensibilities, so that the long-term infrastructure can be built that moves societies forward.

So instead of worrying about bubbles, investors should take a pragmatic, long-term view of the market. AI stocks may look expensive today based on fundamentals. But how relevant are those current fundamentals over the long term? Many of these companies are building infrastructure for tomorrow’s AI-powered world – not just digital platforms, but the underlying systems needed to make them work in the real world.

What is often overlooked in this discussion is that AI is not just a digital story, it is also a physical one. Like the Internet era before it, which required massive investment in fibre-optic networks and data infrastructure, AI’s expansion depends on reliable and scalable energy supply. Data centres, cloud computing and advanced chip manufacturing are all highly energy-intensive.

Recent disruptions in global energy markets have shown how quickly constraints in supply can ripple across industries and economies. While much of the current debate focuses on valuations, what happens next for AI will increasingly depend on whether energy is available, reliable and affordable.

The AI rollout assumes that data centres will have a stable, continuous supply of energy to keep these facilities cooled and running efficiently. Any serious energy disruption could prove disastrous for AI – and for markets in general. Market shocks, like the current oil price shock, can have far-reaching knock-on effects. For investors, this reinforces the importance of diversification – especially when outcomes are harder to predict.

We believe that investment in companies developing tomorrow’s AI infrastructure is still a sound move, but as with previous technological shifts, the winners will not only be defined by innovation but by their ability to operate in practice, including the infrastructure that powers it.

Keen for more? Listen to the recent podcast on this topic here:

Disclaimer

Satrix consists of the following authorised Financial Services Providers: Satrix Managers (RF) (Pty) Ltd and Satrix Investments (Pty) Ltd. The information does not constitute financial advice. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.

Ghost Bites (Exxaro | Gold Fields | Standard Bank)

The Finance Ghost
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Ghost Bites (Exxaro | Gold Fields | Standard Bank)

In this edition of Ghost Bites:

  • Encouraging signs at Exxaro
  • Gold Fields is trying to allay fears about the Tarkwa mine
  • A slower quarter at Standard Bank, but a positive outlook

Encouraging signs at Exxaro (JSE: GFI)

Detailed interim results will be interesting

Exxaro has released a pre-close message for the six months to June 2026. This is part of the broader capital markets day hosted by the company.

Exxaro has seen an increase in coal export, iron ore fines and manganese ore prices over the past year. Coal export prices spiked recently due to the Iran conflict and a switch from gas to thermal coal by many international users. Spot prices have since moderated, based on expectations of the conflict ending, but the spike obviously helped Exxaro on a short-term basis.

For this interim period, they expect coal production to be up by 10% and sales to increase by 6%. Export sales were up by 15%, so it was domestic sales that dragged that number down. Eskom demand is stable, while sales to the ferrochrome market and ArcelorMittal (JSE: ACL) were down.

The export business was assisted by an important 7% increase in performance at Transnet Freight Rail.

Capex in the coal business is expected to be 69% higher in this interim period, so they’ve had some significant capital replacement projects to execute. They expect capex for FY26 to be in line with previous guidance of between R4 billion and R4.5 billion.

Exxaro is also pushing hard in their renewables business, with construction of the Karreebosch wind farm in progress. They are also busy acquiring the operating assets of Acciona Energia, giving them more wind and solar power. Exxaro’s mix of legacy and renewable energy sources is particularly unusual.

The overall story is one of consistent full-year guidance in key areas, as well as some promising underlying metrics for the interim period. We will only know for sure when interim results are released in August.

Ghost Bite: Working through the detailed presentations from a capital markets day is always a good idea. You can find them here.

Gold Fields is trying to allay fears about the Tarkwa mine (JSE: GFI)

Media reports have suggested that there is a significant risk here

Various recent reports in the media have suggested that Ghana is considering a change of control of the Tarkwa mine, where the lease held by Gold Fields expires in 2027.

This is a critical asset for Gold Fields, accounting for roughly a fifth of the group’s total production!

Gold Fields responded to the media reports with a SENS announcement noting that negotiations with the Government of Ghana are in process, regarding the terms of the mining lease renewals. An early application for renewal of the leases had already been submitted in 2025, so this has been going on for a while.

Ghost Bite: Nothing is ever certain when you’re dealing with African governments. It wouldn’t surprise me at all if there’s at least some truth to the media speculation. Gold Fields will hopefully manage to get this one across the line.

A slower quarter at Standard Bank, but a positive outlook (JSE: SBK)

Periods of geopolitical upheaval are difficult for lending businesses

Standard Bank’s voluntary trading update for the five months to 31 May 2026 covers a volatile period in the market, where inflation expectations spiked thanks to the oil price.

We also saw a small rate hike by the SARB, as well as credit rating agencies recognising the progress made in South Africa.

In summary, it hasn’t been a boring time in the world!

If you’re hoping for precise numbers in this update, you’ll be disappointed. They are heavy on narrative and light on actual details, other than an overall message that earnings growth has “moderated” vs. the 12% earnings growth in the first quarter of the year. In other words, the second quarter was a slower growth rate, but we don’t know to what extent.

Africa is a critical part of the Standard Bank investment case. West and East Africa did well, more than offsetting a weaker performance in the South & Central Region.

It sounds like net interest income (NII) came under pressure due to lower average rates and particularly competitive environments in areas like home loans. Impairments were lower though, so that should drive a better result net of impairments.

Non-interest revenue (NIR) was boosted by trading revenue, which isn’t a surprise during a volatile period. They’ve also flagged strong momentum in the Insurance and Asset Management business.

Cost growth was in line with revenue growth, so there’s no sustainable margin uplift story to tell here. With impairments coming in lower though, we still might see a better percentage increase in earnings relative to revenue.

The balance sheet remains in excellent health, with a CET1 ratio of 13.2%. This measures the extent of equity on the balance sheet. A higher CET1 ratio is less risky for investors, but also makes it harder to generate a strong Return on Equity (ROE) as there is simply more equity running around.

For now, Standard Bank has left full-year guidance unchanged, while noting that this quarter put a dent in client confidence and related activity. The market is expecting these issues to dissipate, so Standard Bank remains positive on the full-year picture for now.

Ghost Bite: With Standard Bank’s share price up 46% in the past year and 13% year-to-date, the market hasn’t been concerned about the global geopolitical picture. Positive sentiment around Africa is carrying this share price.

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Sentiment check: banking in Africa

After such a volatile few months, has your outlook on Africa changed?

Results of previous poll:

Nibbles:

  • Director dealings:
    • The crew at Vukile Property Fund (JSE: VKE) are cashing in on a fantastic run in the share price. Top execs, including the CEO and CFO, sold share awards (in excess of the taxable portion) worth a total of over R40 million. I must commend the company on the brilliant layout of their announcement, which makes it very easy to see the taxable vs. non-taxable portion. This should be the industry standard!
    • The CEO of SA Corporate Real Estate (JSE: SAC) sold only the taxable portion of a share award, but the same can’t be said for a few other execs who sold shares worth R4.7 million (including their taxable portions).
  • Good news for Pan African Resources (JSE: PAN) investors: the acquisition of Emmerson Resources has been approved by the shareholders of that company. Court approval in Australia has also been obtained, so Pan African has now been admitted to the official list of the Australian Stock Exchange (ASX) as well. Trading on a normal settlement basis on ASX will comment on 2 July 2026.
  • Eastern Platinum (JSE: EPS) is in the market for a new CFO, as Wylie Hui has resigned with effect from 10th July 2026. He will assist during a transition period for whoever the new CFO will be.
  • Quilter (JSE: QLT) is busy with a share buyback programme of up to £100 million. For context, the group market cap is R57 billion, so this is around 4% of the market cap. Thus far, they’ve repurchased £32 million in shares on the London Stock Exchange and £8 million on the JSE.
  • Mantengu (JSE: MTU) has released an updated trading statement that reflects a headline loss for the year ended February 2026 of 90 cents. To add further insult to the ridiculous situation that happened last year, the JSE has also censured Merchantec Capital for releasing Mantengu announcements that were found to be “speculative, unverified and lacking the required degree of specificity and precision”. As I was one of the people who Mantengu threw mud at in the hope that something would stick, I 100% support this decision. Lacking in precision is probably the nicest way to put it. Even Merchantec’s attempts to get the company to retract the announcements didn’t prevent this censure, giving the entire market a reminder of the responsibility carried by Sponsors and Designated Advisors who release SENS announcements on behalf of companies.
  • If you are a shareholder in Afine (JSE: ANI), the REIT that has a portfolio of fuel forecourts, then be aware that the company has announced the reinvestment price for the dividend reinvest alternative. Shareholders are able to reinvest up to 25% of their dividend in the company at 437.89 cents, calculated as the 30-day VWAP minus the gross dividend.
  • As a reminder of how dangerous the mining sector still is, Harmony (JSE: HAR) reported a tragic loss-of-life incident at Moab Khotsong mine. This was due to a fall-of-ground incident.

Ghost Bites (Datatec | Heriot REIT | Prosus / Naspers)

The Finance Ghost
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Ghost Bites (Datatec | Heriot REIT | Prosus / Naspers)

In this edition of Ghost Bites:

  • Datatec crystallises some of the value in Westcon International
  • The Heriot family is putting more assets into Heriot REIT
  • Prosus / Naspers gives us a peek behind the curtains at earnings

Datatec crystallises some of the value in Westcon International (JSE: DTC)

A special dividend of over R7 billion is on the horizon

Datatec shareholders have been thoroughly enjoying a value unlock strategy by the company over the past few years.

Through a combination of solid performance in the underlying businesses, as well as clever disposals of assets (leading to special dividends to shareholders), the total return to shareholders over 5 years is an insane 584%!

There’s another special dividend coming soon, as Datatec has attracted an investor in Westcon International.

Westcon is the part of the group that is primarily focused on technology distribution, which means they are constantly looking for products that offer decent margins alongside the ability to generate lucrative volumes.

If you’ve been following the mess at Bytes Technology Group (JSE: BYI), you’ll know that being too focused on distributing Microsoft products makes you a sitting duck for that giant to reduce distribution commissions. Diversification is very important in this space, with areas like AI and cybersecurity offering opportunities for distributors in search of better margins.

General Atlantic clearly likes the diversification story, as they are investing a total of $400 million in Westcon. $375 million is in the form of debt that will be used to refinance a shareholder loan from Datatec. $25 million is an equity investment, with General Atlantic acquiring 5% in Westcon from existing shareholders.

If you add in the effect of warrants, they will hold 8.7% immediately after the deal closes, with the ability to increase this over time depending how the warrants pan out.

Together with existing cash on the Westcon balance sheet, the net impact is that $434 million will flow up to Datatec shareholders in the form of a special dividend. This is roughly R7.1 billion, or approximately one-third of the Datatec market cap!

Something to keep in mind is that Datatec’s interest costs will go up after this, as they are replacing internal funding with external debt priced at 9% per annum (and maturing in six years).

This is a Category 2 transaction, so shareholders won’t be asked to vote. They certainly showed their support in the share price though, with Datatec closing 5.9% higher on the date of the announcement.

Ghost Bite: Management teams who complain about a persistent discount in the share price have two choices. They can either keep complaining without doing anything about it, or they can crystallise value further down in the structure and demonstrate the discount in action. Datatec follows the latter approach, to the benefit of all its shareholders.

The Heriot family is putting more assets into Heriot REIT (JSE: HET)

Interesting deal, but pity about the tightly held shareholder register

Heriot REIT announced the acquisition of 75% of Katleho Property Investments (KPI) from two entities that are part of the Heriot family structure. One of the entities already holds 89.07% in Heriot REIT, reminding us just how tightly held this share register is.

The portfolio consists of three office parks in Gauteng. We are at an interesting point in the cycle for both Gauteng and office properties in general. To sweeten the deal for minority shareholders in Heriot, the properties are being acquired at a 20% discount to net asset value (NAV).

When you hear something like that, the first thing you need to do is check how the assets are being paid for. If it’s a share-for-share deal, then a discount to NAV is all relative. In other words, if the shares in Heriot are being issued at a similar discount, then it all comes out in the wash.

The good news is that the NAV as at 31 December 2025 was approximately R22.90 per share. These shares are being issued at R23 per share. Although that NAV is out of date by six months, it seems as though the acquisition is at a significantly higher discount to NAV than the issuance.

The deal is worth R129 million, which is very small in the context of Heriot’s market cap of nearly R7.4 billion. Even though this is a related party transaction, it’s too small to even trigger the requirements for a “small related party transaction” under JSE rules.

But because it involves the issuance of shares to a related person, it falls under the ambit of the Companies Act and requires a special resolution by shareholders.

Ghost Bite: Heriot has extremely thin trade in its shares. If the company has any plans to do something about that and unlock liquidity, related party deals certainly won’t get them there.

Prosus / Naspers gives us a peek behind the curtains at earnings (JSE: PRX | JSE: NPN)

The numbers are up, but will it be enough to shift sentiment?

Within the Naspers / Prosus stable, it feels like they’ve been putting most of their effort into telling the Prosus investment story on the global stage. I’ll therefore start with Prosus when dealing with the results of this duo. As a reminder, Prosus is a subsidiary of Naspers.

In the year ended March 2026, Prosus delivered over $7.3 billion in revenue and $1.1 billion adjusted EBITDA in what they now call Ecosystem (formally called eCommerce). Most importantly, each of the underlying ecosystems is now profitable, which is key to the group’s overall “Tencent plus” strategy. In other words, they want the market to place meaningful value on the group excluding Tencent.

Thanks to this result, core HEPS from continuing operations for the N shares is expected to increase by between 19% and 28%. Taking out the “core” adjustments, HEPS from continuing operations for the N shares is up by between 6.7% and 15.7%.

A critical difference is that core HEPS excludes fair value investment movements within Tencent’s earnings. Tencent has acted as a source of venture capital in the Chinese tech market. Results have been mixed, especially as sentiment towards Chinese assets has been negative recently

Here’s a reminder of how closely correlated Tencent is to Prosus, with a view on the ADRs (American Depository Receipts – i.e. both measured in USD) of both companies over 5 years:

The businesses that are only in Naspers (and not Prosus) are too small to make a significant difference to the group, even though this includes the entire Takealot stable! At Naspers, the core HEPS move is between 20.8% and 27.8%, while non-core is between 8.3% and 15.3%.

Both companies are expected to release results on Monday, 29th June. The market will pay plenty of attention to them.

Ghost Bite: I remain long Prosus as an ex-US tech platforms play.

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Pre-results sentiment check: Prosus / Naspers

What is your current feeling towards Prosus / Naspers?

Results of previous poll:

Nibbles:

  • Director dealings:
    • To “rebalance their portfolios” (rather than because of a need to cover taxes), the CEO and CFO of Lewis (JSE: LEW) sold shares worth nearly R7.9 million in total.
    • An associate of a prescribed officer of Insimbi Industrial (JSE: ISB) bought shares worth R2.6 million. There’s been a lot of movement on that share register recently!
    • The company secretary of Mr Price (JSE: MRP) sold shares worth just over R1 million.
  • Castleview Property Fund (JSE: CVW) is an extremely tightly-held stock that rarely changes hands. Those who are on the register are smiling though, as the final dividend per share for the year ended March 2026 is 90.2% higher than the prior year! Full results are due on 26 June.
  • Sebata Holdings (JSE: SEB) has renewed the cautionary announcement regarding a potential disposal of assets. In any event, the shares are suspended from trading at the moment.
  • Stefanutti Stocks (JSE: SSK) announced that Zanele Matlala is retiring as chairman of the board, having served as a director since 2012. Howard Craig will replace her as chairman.

The mystery behind the Mechanical Turk

Dominique Olivier
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The mystery behind the Mechanical Turk

Some mysteries survive not because they’re clever, but because the truth is so simple that nobody wants to believe it.

You’ve heard about artificial intelligence, sure. In fact, by now you’re probably a bit sick of hearing about artificial intelligence. But what about artificial artificial intelligence?

It sounds like a joke, but this is a real thing: people are being paid to do menial jobs that artificial intelligence can’t quite get right yet – things like labelling images, transcribing, and answering survey questions. A business might want their customers to think that these tasks are being performed by an advanced AI agent, while secretly farming the job out to low-paid, human workers, mostly in third-world countries. 

Perhaps the most famous example of this is Builder.ai’s “AI agent”, Natasha, who promised to build a fully-functioning app based on only a user description. As it turns out, Natasha was just a front. Investigations revealed that most of the work was actually done by human engineers – about 700 of them, primarily based in India. The “AI” part mainly involved routing tasks to these engineers and occasionally using large language models to generate boilerplate code. As the joke goes, the AI in this instance stands for Actual Indians. In case you’re wondering, the company has since filed for insolvency.

Amazon saw this gap in the market a long time ago and swooped in to monetise. They’ve been offering a service called Mechanical Turk, or MTurk for short, since 2005. Similar in some ways to TaskRabbit, MTurk is essentially a job platform that lets companies farm out little scraps of digital work to a vast crowd of people online. Each is paid a few cents to do a task a computer can’t quite manage on its own. The result is work that looks automated, but is actually being done by a person.

Mechanical Turk is a strange name for a piece of modern software, and it isn’t an accident. To understand where it comes from, we need to talk about a chess-playing robot that fooled Europe for the better part of a century.

Enter the Turk

The late 1700s were the golden age of the automaton – not a typo, but rather an intricate clockwork machine built to mimic living things. Inventors across Europe were producing mechanical ducks that appeared to eat and digest grain, mechanical boys that could dip a pen and write a sentence, and mechanical musicians that played real instruments with eerie little fingers. 

Automatons were the must-have spectacles of the age. They drew gasps at royal courts and emptied the purses of the wealthy. In 1769, a Hungarian inventor named Wolfgang von Kempelen watched a magician perform at the court of Empress Maria Theresa and was distinctly unimpressed. He announced he could do better, and promised to return within a year with something that would put the illusionist to shame. This is the kind of confident statement that tends to set people up for failure, but Kempelen delivered.

What he brought back in 1770 was a life-sized model of a man – bearded and dressed in Ottoman robes and a turban – seated behind a large wooden cabinet with a chessboard on top. In its left hand it held a long Ottoman smoking pipe, while its right hand rested near the edge of the board, ready to move. 

Kempelen would begin each show by theatrically opening the cabinet’s doors and drawers, revealing a dense thicket of gears and cogs, letting the audience peer right through the machine. Nothing in here but honest machinery, the gesture said. Then he’d announce the Turk was ready to play, and invite a challenger forward.

The Turk would consider the board, lift its wooden arm, and move its pieces. It nodded when it threatened your queen. It shook its head disapprovingly if you tried to cheat; one challenger deliberately made an illegal move with his queen, and the Turk promptly picked the piece up and put it back where it belonged, declining to dignify the attempt. And then, with grim and unfailing regularity, it beat you. Usually within half an hour.

A long and undefeated career

People lost their minds, in the polite eighteenth-century manner. One elderly woman at an early showing was so convinced the machine was possessed by an evil spirit that she hid in a window seat as far from it as she could get. More resourceful minds set themselves to working out the trick, and produced a magnificent body of theories, most of them wrong. 

Some thought Kempelen was guiding the arm with a magnet (he cheerfully invited spectators to place their own magnets on the cabinet, which did nothing). Some thought there were wires thinner than a hair controlling the Turk from above, like a puppet. Edgar Allan Poe, who saw the Turk decades after it was introduced, wrote a famous essay concluding that a man must be folded up inside the figure itself – wrong, but beautifully argued.

The marvel could not be beat, and the machine even outlived its inventor. After Kempelen died, it was bought by a showman named Johann Mälzel (the same man who popularised the early metronome), who toured it relentlessly and even gave it a voice box so it could rasp “Échec!” when it put you in check. 

Over its long career the Turk beat, among others, Napoleon Bonaparte (who reportedly tried to cheat, had his pieces swept off the board for his trouble, and rather enjoyed it) and played Benjamin Franklin, who remained fascinated by the thing for the rest of his life. For more than eighty years, across two continents, the wooden Turk defeated statesmen, aristocrats and grandmasters while Europe argued about how on earth it could possibly work.

The man in the box

The true answer, of course, was the most boring one available. There was a person inside, just not in the figure (as Poe suggested).

The cabinet that Kempelen so generously opened to the public was a masterpiece not of chess, but of carpentry and misdirection. The clockwork the audience could see only extended part of the way back. Behind it sat a sliding seat that let a hidden operator shift from side to side, staying tucked out of view as each door was opened in turn, while dummy gears slid obligingly into place to fill the space. 

Every chess piece had a small magnet in its base, and beneath the board a corresponding magnet on a string would twitch to show the operator exactly which piece had moved where. A system of levers let the operator work the Turk’s arm from inside, by candlelight, with the smoke vented discreetly up through the turban.

The operators were the real secret, and they were excellent – a rotating cast of strong chess players, most of whom history never named, crammed into a hot wooden box for hours to keep the illusion alive. People had guessed this, again and again. They simply didn’t want it to be true. 

When two teenagers spotted an operator climbing out of the cabinet in Baltimore in 1827 and the story made the local paper, almost nobody believed it. The world, as one writer put it, had decided the secret was far too deep to be cracked by a couple of boys.

The Turk was eventually destroyed in a fire in 1854, and three years later the son of its final owner finally published the full explanation. By then there was nothing left to protect, and not much of an audience left to surprise.

The razor still cuts

Occam’s razor is a rule of thumb that has served scientists, detectives, and exhausted parents well for the better part of a thousand years. It says that when you’re faced with competing explanations, the simplest one is usually correct. 

The trouble is that humans are about as bad at applying it today as we were back in the 1700s. We are drawn to the complicated answer the way moths are drawn to porch lights, and for roughly the same reasons: it’s shiny, it promises something, and we don’t fully understand it. Give a person a choice between “there’s a simple trick here” and “this defies all known laws of nature,” and a surprising number will plant their flag firmly in the second camp and refuse to move.

Which brings us back to Amazon’s MTurk, and to the joke buried in the name.

We are once again surrounded by machines that seem to think – software that writes, draws, answers and decides. And once again, the truth is frequently less magical than the marketing. A great deal of what gets sold as pure artificial intelligence runs on enormous quantities of hidden human labour: the people who label the training data, moderate the worst of the content, and correct the machine when it stumbles. The industry even has a tidy phrase for it – “human-in-the-loop” – which is really just a modern way of saying there’s a man in the box.

Amazon, to its credit, didn’t pretend otherwise. It looked at a system held up by invisible human workers, reached back two hundred and fifty years for the most famous example of exactly that, and named its platform accordingly. 

So the next time something seems too clever to possibly be human, it’s worth picking up the old razor and asking the boring question first. Not “How does the magic work?”, but “Who’s in the cabinet?”

About the author: Dominique Olivier

Dominique Olivier uses her love of storytelling and ideation to help brands solve problems.

Her first book, Lessons from Loss, has been published by Penguin Random House.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.

You can learn more about her work at dominiqueolivier.com and she can be reached on LinkedIn here.

Ghost Stories #106: Load shedding to load sharing – South Africa’s energy market evolves

The Finance Ghost
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Ghost Stories #106: Load shedding to load sharing – South Africa’s energy market evolves

Listen to the podcast here:

The Finance Ghost sits down with Tokollo Tau from Nedbank CIB to unpack how South Africa’s energy landscape is evolving beyond the dark days of load shedding. What once felt like a permanent crisis has receded into the background, but the real story now is what’s being built in its place (like power wheeling and aggregation).

Against the backdrop of the Africa Energy Forum, the conversation explores the infrastructure and commercial models that are reshaping how electricity is generated, moved and sold across the country, unlocking new levels of flexibility and opportunity for businesses.

With practical examples like the multi‑billion‑rand Notsi Solar Project, Tokollo explains how aggregators are bridging the gap between generators and large energy users, helping to solve coordination challenges and accelerate investment in the sector. The discussion also highlights Eskom’s evolving role as an enabler of this ecosystem, and what a truly tradable electricity market could look like in South Africa.

The result is a compelling look at a market in transition and why this could mark the start of a far more competitive, efficient and investable energy future.

Key topics covered:

  • What power wheeling and energy aggregation actually mean (without the jargon)
  • How projects like Notsi Solar demonstrate the new energy ecosystem in action
  • Why aggregators are critical to unlocking investment and reducing project risk
  • Eskom’s shifting role in a more open, competitive electricity market
  • The long-term outlook: towards a tradable electricity market and greater energy choice

Transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast.

Isn’t it amazing how it feels so long ago that we were checking apps? We were planning our dinner times and weekends, and if it was still the case, we’d be wondering if we’d be able to watch Bafana at the World Cup, if we’d have electricity!

Feels like years ago. And in some respects, I guess it was years ago because thankfully, the words “load shedding” have largely been banished to the history books, which is awesome.

It means that businesses are feeling a whole lot better about actually operating in South Africa. And thank goodness for that, because obviously we need all the boosts we can get to our GDP. But the local energy market has actually gotten much more exciting than us just saying, “well, load shedding is a thing of the past”.

We also now have market infrastructure in place that allows for concepts like power wheeling, energy aggregation – something that I’m certainly looking forward to learning more about.

And with Africa Energy Forum taking place essentially as we speak, we’ve got Tokollo Tau from Nedbank to help us make sense of it all. And to understand a little bit more about the evolution of the electricity market in South Africa.

So, Tokollo, thanks so much for doing this with me and I’m looking forward to these insights.

Tokollo Tau: Thank you for having me, Ghost. And a warm welcome to the listeners.

The Finance Ghost: Let’s jump straight into a little bit of jargon busting, because we’ve got concepts like power wheeling and aggregation.

For those who are not necessarily in the renewable energy space (like me, to be honest), it’s not necessarily obvious what these things are actually referring to. So maybe you can just kick us off by just explaining what power wheeling is, what aggregation is?

And then just confirming whether or not power wheeling is actually needed for aggregation. These things essentially depend on each other, right?

Tokollo Tau: That’s a fantastic place to start. Wheeling, in its simplest form, is the ability to move electricity across the grid from where it’s generated, to where it is consumed. This is done via transmission network. It’s owned by Eskom and municipalities.

You can think of this as the toll that one would pay to use the highway.

Aggregation, on the other hand, is a commercial model. It’s when an intermediary player buys power from multiple generators and sells that power to multiple customers in a structured manner.

Wheeling opens up choice, and aggregation helps efficiently organise that choice.

The Finance Ghost: So it’s safe to say that wheeling is the technology that allows us to have a scenario where there’s a windy part of South Africa or a very sunny part of South Africa, that is suitable for some kind of renewable energy that can be built there – and that can supply mines right on the other side of the country, right?

That’s the power of this thing.

Tokollo Tau: A good way for the listeners maybe is if I provide an example. We recently closed the Notsi Solar Project (Notsi), which is a large project that’s located in the Free State. The project was brought to life by Anthem, which is a private player in the energy space. The project had Discovery Green and Noah as the off takers.

Discovery Green is a good example of an aggregator that we’re discussing today, because it serves a diverse base of customers. Some of these are names that one might be aware of, such as Afrox, UCT and Impala Platinum. All of these are located across various locations in the country.

Notsi isn’t just being built for a single customer. The project illustrates how electricity can be generated and supplied to different customers and businesses across different sectors and parts of the country. This is how wheeling is making aggregation possible.

The Finance Ghost: It’s super interesting. You get these utility scale projects like the one you’ve just mentioned there.

It reminds me when there was this proliferation of these grocery apps. Just when everyone started with on-demand grocery, and I think there was one, I’ve forgotten its name, but their whole claim to fame was that they could run around and buy whatever you wanted from whichever shop you wanted.

So, you weren’t just ordering from a Checkers or a Woolworths, or a Pick n Pay, they were running around and you could buy from each of these different stores, and they would bring everything to you.

Feels a little bit like that’s what the aggregator’s role is, right? There are all these different power options out there. There’s power wheeling, there’s these projects and they focus on delivering these power sources to the customer, right?

Tokollo Tau: Yes, I would say your take is correct. The role that aggregators play, is that they’re able to source, for instance, in your example, the vegetables from one shop and then source cleaning equipment from another source and be able to deliver it all to customers.

This makes the life of the customer much easier because they never have to leave their home. It provides them with a lot more choice.

The Finance Ghost: So understandably, this spreads the load around power generation, right? Because historically that’s been our problem.

We have the transmission infrastructure, as I understand it, but generation is where we’ve struggled because Eskom just couldn’t keep up with the needs of the country’s power.

And what we’ve now seen is this big investment in electricity generation, and a whole bunch of just infrastructure-type developments to then make it possible for things to happen this way. And the way that Nedbank is then participating in this, is across both public and private sector opportunities.

So, what are the shifts that you’ve then seen in the market that are really driving this underlying evolution? Power availability must be one of them, surely cost is another. What is driving all this activity that we’re seeing?

Tokollo Tau: I would certainly say that the biggest shift that we are seeing is that businesses are moving from crisis response to strategic procurement. If I think about the conversations that we were having a few years ago with our clients, the conversations were centred around how do businesses survive load shedding.

But what we are increasingly seeing now, is they’re asking the question, how do they secure long-term, cost-effective and lower-risk power? This is a far more mature market discussion, in my opinion.

The Finance Ghost: So, Tokollo, you’ve referenced a maturing conversation and it does sound a whole lot better. We’d much rather have a world where businesses are seeing this as an investment that brings down their costs, for example, and those sort of things, rather than, “oh my goodness, do I even have power to actually operate?”

Because clearly that’s a disaster. We know the impact that had on our economy, whereas here it’s more like, “this is a business decision, we want to bring that cost down.”

So, what does that mean then in terms of us moving towards a more tradable electricity market in South Africa? Because I’ve heard this term used, but obviously as someone who’s not really in the space, I’m not exactly sure what that practically looks like. Maybe you can explain that concept of a tradable electricity market?

Tokollo Tau: Tradable electricity market simply means that customers have choice of who they buy their power from. Currently, the only choice that we have is whoever has been assigned as your distributor. This can be Eskom and in some cases, this can be municipalities.

Once you’re in a tradable market, clients can buy from multiple generators, similar to how you have the choice between MTN and Vodacom. It would be similar in that regard, in that one would have flexibility to decide who to purchase their power from.

The Finance Ghost: This is, at the end of the day, all part of Eskom’s broader reforms, right? Because they are, at the end of the day, roughly 80% of South Africa’s power generation. And they are also the transmission infrastructure to a very large extent. So, Eskom is still at the centre of all of this.

Going back over the years, I’ve heard many times about Eskom’s different business lines and how they’re focusing on different things. And this is really the transmission piece coming through.

Because technically, the power generators, these renewable energy programs, etc. – they “compete with Eskom” but actually, Eskom can participate in that ecosystem by providing the transmission, and just improving the overall South African electricity market, right?

Would that be a fair statement on how Eskom is actually thinking about this and how it all kind of works together?

Tokollo Tau: I would say you’re on the right path, Ghost. One of the biggest mistakes that people make is viewing this as a choice between Eskom and private generation.

This simply isn’t true. Eskom remains the backbone of the system. And many of the developments that we’re discussing here are only possible because of the infrastructure that’s in place. This is why I don’t see this as a story of Eskom versus private generation. It’s actually a story of how different participants are contributing to a broader, more flexible market.

I would agree with you that in today’s terms, Eskom still supplies the majority of the electricity. But the key change that we’re seeing, is its gradual move towards facilitating a more open system.

This is done by allowing third-party access to the grid and supporting the development of transmission frameworks. Eskom, by doing this, has effectively enabled others to generate and trade electricity.

The Finance Ghost: And the benefit of these aggregators, right, is they are ultimately that commercial bridge between the power-generation-type project and then the energy users on the other side, which would be large industry. In this case, they would typically be the ones engaging, I would think, with the aggregators?

And I would imagine that this unlocks projects a lot faster than perhaps some of the more traditional ways in which large projects would have come to bear fruit?

So, perhaps you can just explain the extent to which these aggregators are actually bringing some efficiency to the story as well, in terms of helping to get projects across the line and just making them economically viable and attractive?

Tokollo Tau: I would say that the main issue that the aggregators are solving is a coordination problem in the market. This is because they make it easier for supply and demand to come together quickly and efficiently.

Aggregators make it easier for large projects, such as the Notsi project, to connect with multiple customers, rather than them relying on a single buyer.

If you think of it this way, not every business needs power at the same time. And not every solar and wind project produces power in exactly the same way.

Aggregators help connect those moving parts. By working with multiple projects and multiple customers, they make the market more flexible, and they help ensure that electricity reaches where it’s needed most.

I would say that without aggregators, every company would need to effectively find its own power source.  This is not efficient, in my opinion. And aggregators providing choices to customers as they bring electricity from multiple projects and connect it with multiple customers.

This has created flexibility and has made the market easier to navigate.

The Finance Ghost: And it helps to de-risk the project, right? Because the project is now not having to go and find just one customer (on the other side of the country, potentially) and do all that work. They just need to deal with the aggregator.

And the aggregator says “Okay, cool, don’t worry, we’ve got this, we’ve got customers”. And like you say also different times in the year, seasonality – it’s almost like how a tech company will have different needs at different times of year, different times of day, where they’ve got a different load on their system and the amount of data they’re pulling. It’s a very similar situation.

These companies don’t always need the power at exactly the same time. And that’s the role that aggregators help play.

And like I say, de-risking projects which for you from a banking perspective makes their role very important, I’m sure?

Tokollo Tau: Yes. When the market was initially opened up, what we’re seeing was that the private generators that we were funding, they were entering into bilateral agreements with certain mines.

And this process was slow and cumbersome, because a mine is not necessarily versed in contracting for long-term electricity and a generator is not necessarily being efficient by looking for multiple customers. Their efficiency comes from the ability to permit, get the project constructed, get it to financial close, and get it operational.

So, it is efficient that they have an intermediary which is this aggregator, that they can contract to as the generator. And then on the other side you also have the buyers, the mines, the smelters. They simply can come to an aggregator, and an aggregator can offer them, instead of 20-year contracts, they can enter into 5-year, 10-year contracts in order to secure their power.

And because the aggregator has access to multiple generators, they can essentially tell the customer “I can give you a different load profile, I can give you electricity during the day from the sun, I can give you electricity from the wind during night times” – which then better matches the customer’s demand.

So yes, I would say it has helped the market quite credibly in my opinion.

The Finance Ghost: Yeah, it’s pretty interesting. It’s like taking a traditional business which would have product and then marketing and sales and everything else that would all normally live in one business.

But in this value chain, because of how specialised it is, because of all the regulations, because of the extent of infrastructure, it almost splits it out. It’s like the aggregators are the route to market. And the product is coming from someone else.

It just makes sense to then have these different players in the market solving different things, right?

I’m aware of examples elsewhere in Africa. For example, Africa GreenCo in Zambia. Perhaps there are some lessons that South Africa can learn from what is going on elsewhere on our continent.

Maybe you can just talk us through a little bit of what some of those lessons might be as we start to bring this to a close and talk about what the future looks like for South Africa.  

What lessons can we maybe learn from something like that in Zambia?

Tokollo Tau: I would say that the biggest lesson is that credible intermediaries matter.

In Zambia, for instance, GreenCo has replaced the need for plants to contract with the Eskom equivalent, which is ZESCO. This means that you have a party that is more bankable from a banking perspective, and it allows projects to reach financial close.

So, whether you’re looking at aggregators in South Africa or whether you’re looking at GreenCo in Zambia, I think the common theme is that the markets are becoming more investable when someone can stand in-between generators and the users of power.

And by managing the complexity and creating confidence on both sides, aggregators have made this possible. And in my opinion, this is how the transactions have moved forward and have created a real market for the power.

The Finance Ghost: So, Tokollo, we’re talking big numbers here, right? Obviously this is Nedbank CIB, so you guys are investing in – and funding – very large projects. That’s the nature of the CIB business. That’s where you’re focused.

And these are multi-billion-rand projects that we’re talking about, of which I’ve seen a couple in the headlines recently.

Perhaps you can just give a quick overview of the types of numbers we’re looking at here? This is what’s needed to move the dial, right? This is where Nedbank makes a difference and participates.

Tokollo Tau: The projects are indeed large. I mean, if you look at the Notsi project which closed earlier this year, the project is a 470-megawatt solar project, and it is close to R10 billion from a quantum perspective, because lenders only have access to the projects. So, we funded the project through project finance, which is limited recourse.

And where this is important is that the only source of repayment that lenders will have will come from the cash flows that the project generates. We are not taking any balance sheet support from anyone. The only form of repayment that we can place an emphasis on, is the project’s ability to generate cash flows in the future.

And we’ve then taken a view that we will get repaid from Discovery and Noah, who are the aggregators, and they are getting their money from the customers in the background.

So, from a bankability perspective, instead of Notsi having to source and contract with over 20 customers, for instance, it only needed to focus on two customers. This provided a lot of comfort to the lenders.

The Finance Ghost: And these are very long-term projects. This, at least, is my wheelhouse, not necessarily understanding the actual electricity side, but certainly the sort of returns you need on things and what tenure we’re looking at.

These are long-term projects and that means that you need to feel good about not just South Africa, but also the electricity infrastructure in South Africa. You’re running models that go out for a long time; and yes, you’re a debt provider, but still, you’re exposed to whether or not this thing is actually a success.

So, I guess we can safely assume that based on the level of activity here, the size of these transactions: you must be feeling quite optimistic about where the energy market is heading in South Africa?

Tokollo Tau: I would say that I’m partly optimistic, Ghost. A few years from now, what we’ll probably start to see is that businesses are going to have a lot more choice in where they buy the power from, as opposed to Eskom remaining the central person, and the only option that they have.

Private generation and wheeling, will probably start to play a bigger role than what we are seeing now.

It’s encouraging for me because we’re starting to see a lot of those building blocks already in place today, where we’re seeing projects such as Notsi come to light.

For businesses, it’s important because it’s going to give them greater flexibility in the future and it’s going to give them more certainty around energy costs and stronger long-term competitiveness in the international market.

The Finance Ghost: What I’m excited about is it also just taps into our country’s natural endowment, right? We have really windy parts of the country, but that might not be where the big power user actually is.

We have areas where the sun just doesn’t stop shining. Once again, the power user might be somewhere else. So, between wheeling and aggregation, it just makes sense. It just connects the dots here and it really helps to create a far more efficient market, which is exciting.

So perhaps a last question then, and then I’ll let you go off and do this conference and do all these important things that you’re doing for our country – do you feel like we’ll perhaps look back on this as a period that was the beginning of what is a fundamentally different energy market in Southern Africa? It sounds like the answer would be yes, but I want to hear it from you.

Is this the beginning of something big?

Tokollo Tau: I’d like to believe so, Ghost. I think we’re headed in the right direction. If one just looks at where the South African electricity market is right now and where it’s headed relative to a few years ago, there’s a lot of appetite on the Southern African power pool. There’s a lot of movement in the Zambia region with the emergence of your GreenCos and Solarcentury.

I would say I’m very optimistic that we’re headed in the right directions and we are beginning to see a more liberal electricity market as we head towards the future.

The Finance Ghost: Fantastic, Tokollo. Thank you so much. I would encourage anyone who wants to reach out to you or connect to go and find you on LinkedIn. And of course, people can also go and visit cib.nedbank.co.za, go and look through all of the solutions there and many of the deals that Nedbank has been involved in.

There’s always been a strong renewable energy slant to the Nedbank business. They are the green bank, not just in colour and in brand, but also in spirit.

I have some experience in working in the banking sector to be able to say that, and it’s great to see this coming through.

So, Tokollo, thank you so much and enjoy the conference.

Tokollo Tau: Thank you, Ghost, and thank you to our listeners.

Ghost Bites (BHP | Brait | enX | Libstar | Reinet | Sephaku | STADIO)

The Finance Ghost
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Ghost Bites (BHP | Brait | enX | Libstar | Reinet | Sephaku | STADIO)

In this edition of Ghost Bites:

  • BHP flags worsening economics at the Jansen Project
  • Brait’s creative use of the words “value unlock”
  • enX attracts an international buyer for New Way Power
  • Libstar flags a disappointing interim period
  • Reinet is starting to return cash to shareholders
  • Sephaku grew earnings despite pressure at Sephaku Cement
  • STADIO’s contact learning growth strategy shines through

BHP flags worsening economics at the Jansen Project (JSE: BHG)

First it was delayed – now it’s also going to cost far more than planned

There are two measures of success for large capital projects: on time and on budget. Sadly, BHP’s Jansen Stage 2 project is going to be neither of those things.

When they approved the project in October 2023, the intention was for first production to be in 2029. Understandably, there’s a lot of forecasting risk attached to these estimates.

In 2025, they announced that first production would only be two years later than initially planned, i.e in 2031. That doesn’t do great things for net present value (NPV) calculations.

Now it gets worse, as the initial project cost estimate of $4.9 billion has been blown out of the water by an increase to $6.9 billion. That’s a casual 40% overrun for shareholders to stomach in addition to the two-year delay.

The end result will be a project that contributes 10% of global potash output. That sounds impressive, but the internal rate of return is now only expected to be 11%. This would be in hard currency, but that’s still not an exciting return for a mining project.

And based on the recent trend, how can we be sure that there won’t be further delays and overruns?

Ghost Bite: The Jansen project is being impaired by $2.3 billion. When we are still five years away from production and there are already impairments, the alarm bells are ringing.

Brait’s creative use of the words “value unlock” (JSE: BAT)

I don’t think I’ve ever seen a rights offer alongside promises of a value unlock being in its final stages

According to Brait, they are in the final stages of their value unlock strategy. Goodness knows they still have a lot to do, including the sale of New Look, the listing or sale of Virgin Active and the repayment of residual debt in Brait.

For a company that is close to unlocking value, it’s very unusual to see a capital raise from shareholders. That’s the exact opposite of a value unlock!

The reason is that Virgin Active needs to raise £175 million from shareholders to repay existing debt and achieve a net debt / EBITDA ratio of 2.0x. This is despite EBITDA growing by 37% year-on-year in Virgin Active.

Brait is looking to contribute £108 million of this capital raise. To do it, they need to raise R2.5 billion from existing shareholders at a discount of 25% to the theoretical ex-rights price. This is a massive discount of 43% to the net asset value post the rights offer!

In a shock to absolutely nobody, Titan (Christo Wiese’s company) has underwritten the full rights offer. At least letters of allocation will be tradeable, so shareholders who don’t want to follow their rights might be able to sell those rights to somebody else.

Shareholders will also no doubt be thrilled to learn that Brait will take a further step to facilitate the value unlock strategy by redeeming its convertible bonds for £138 million. This will be done through the residual rights offer proceeds, the cash Brait proceeds from the sale of Premier (JSE: PMR) and the use of a revolving credit facility.

Replacing one type of debt with another is an unusual way to describe a “value unlock” strategy.

At least New Look is making some progress, with the shift to a more digital model contributing to EBITDA of £37 million for the year to March 2026.

Ghost Bite: The share price fell roughly 10% on the news. Value is being unlocked, but in the wrong direction.

enX attracts an international buyer for New Way Power (JSE: ENX)

But with only a small part of the immense cash pile

The enX value unlock continues. The company has announced the potential sale of New Way Power (NWP), the largest remaining asset in the enX portfolio. The deal is far more advanced than merely the negotiation stage, as enX has released a firm intention announcement that sets out the key terms.

This is the business that focuses on generators and renewable energy. For obvious reasons, this was a far more lucrative business during load shedding. Still, they’ve attracted Generac as a buyer, a company listed on the New York Stock Exchange.

I suspect that Generac is primarily interested in the IP, manufacturing capacity and our position as a gateway to Africa, rather than the revenue opportunity in South Africa itself. That’s quite the show of faith in our local economy and particularly our design and manufacturing base!

Together with the property occupied by the business, the price on the table is R220 million. It could go up to R260 million, depending on how adjustments to the purchase price pan out. The initial price is based on R130 million for the business and R90 million for the property.

For context, the balance sheet as at 28 February 2026 reflects net assets in the business of R156.7 million and the property at R93.5 million. Considering they suffered a loss before tax of R4.5 million in the business and generated a profit before tax of only R2.4 million in the property company, getting out of this business at a price this close to net asset value is a good outcome in my view.

Due to the size of the deal, it triggers numerous Takeover Regulation Panel requirements. This includes the appointment of an independent expert to opine on the fairness and reasonableness of the deal. BDO has been appointed and the opinion will be included in the circular once it goes out to shareholders.

Before shareholders count their money, there’s an incentive deal with the CEO of NWP that needs to be settled. It looks like this could be as high as 30% of the adjusted proceeds from the sale of the business (not the property).

It’s a suspensive condition for the entire deal, so shareholders have no choice but to approve it if they want the rest of the deal to go ahead.

Ghost Bite: I don’t think this is an easy business to sell, so shareholders will need to think carefully here about being too greedy. The BDO report should be interesting.

Libstar flags a disappointing interim period (JSE: LBR)

They are running below expectations and profits are under pressure

Libstar has released a voluntary trading update dealing with the 21 weeks to 31 May 2026. They’ve excluded the fresh mushroom operations from the numbers to make things more comparable on a year-on-year basis, as this business was disposed of on 1 December 2025.

They’ve unfortunately come in below expectations, with revenue growth of just 0.9% vs. the prior period. Volumes were up 0.3%, with the rest coming from price and mix effects.

Aside from relatively modest consumer demand (low-single digit growth in the group’s retail basket), they also struggled with production disruptions at the Dickon Hall Foods business. These disruptions were driven by labour challenges and water shortages.

As a further challenge, the Dry Condiments export business was hit by the strength of the rand, the impact of shipment timing and overall weakness in demand in Australia and Asia.

Other areas of the business (like dairy and meat) did well, but not to the extent required to achieve a net growth position for the group. If you exclude Dickon Hall Foods, group revenue was up by 3.5%.

With flat revenue, the group’s profits were a sitting duck in an inflationary environment. Production costs go up and recovery of overheads is weaker when throughput is below expectations (like at Dickon Hall Foods). You also have to consider the spike in fuel prices and related costs of packaging and distribution.

Gross profit margin was down by between 100 and 150 basis points at group level. This is despite margin improvements in the dairy business and a flat performance in meats.

Although operating expense growth was below inflation, it’s clear that this is going to be an unhappy set of interim results for investors.

Despite this pressure, the ongoing generation of cash flow means that Libstar is continuing with share repurchases.

The net debt to EBITDA ratio (calculated using EBITDA on a last-twelve-months basis) is 1.3x, an improvement from 1.6x in the prior period. There are a couple of potential asset disposals that could give further support to the balance sheet if they go ahead.

Ghost Bite: Libstar has disappointed investors many times. It’s a pity that the interim period is going this way.

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Libstar - value trap or opportunity?

What is your view on Libstar?

Reinet is starting to return cash to shareholders (JSE: RNI)

But with only a small part of the immense cash pile

As I jokingly posted on X at the end of May, Reinet has enough cash to acquire both Pepkor and The Foschini Group! I just plucked these names out of the air to show you what a cash balance of R110 billion is capable of buying.

We have no idea what Reinet was actually looking at buying, but we know that they were considering a “potentially very significant investment opportunity” with their mountain of money. The deal isn’t going to happen though, so they are commencing a share buyback programme instead.

The current net asset value (NAV) per share at the fund is €36.31, or around R684 at current exchange rates. Reinet is trading at only R453 per share, so buybacks should be accretive to shareholders.

It’s just a pity that only €500 million (R9.4 billion) is being earmarked for this programme. It’s a start, but it doesn’t make much of a dent in this lazy balance sheet. It’s also going to take time, with only €75 million expected to be used by mid-August 2026.

Ghost Bite: The announcement came out after the market was closed. I expect to see a positive response from the share price once the market can trade on this news.  

Sephaku grew earnings despite pressure at Sephaku Cement (JSE: SEP)

Métier Mixed Concrete did the heavy lifting

Sephaku Holdings has two major business interests: wholly-owned subsidiary Métier Mixed Concrete and associate Dangote Cement (known as Sephaku Cement).

In the year ended March 2026, the former was the star of the show. We don’t have all the details yet, but the group has flagged strong growth in both revenue and profit at Métier Mixed Concrete. The same certainly can’t be said for Sephaku Cement, where revenue was down 4% and EBITDA fell by 9%.

Thankfully, the pressure on Sephaku Cement was more than offset by the wholly-owned subsidiary moving in the right direction in this period. This is why group HEPS has increased by between 17% and 22% for the year.

Ghost Bite: We will know more when results are released on 2 July 2026. But the market celebrated in the meantime, with the share price up 8%. I must note that this was on weak volumes, so don’t give too much credit to that move.

STADIO’s contact learning growth strategy shines through (JSE: SDO)

They are on track to meet the 2026 goal

At STADIO’s AGM, company management gave an update on the recent trading performance. As at June 2026, they’ve managed year-on-year growth of 8% in distance learning students and 15% in contact learning. This combines into growth of 9% at group level.

The contact learning numbers have been boosted by the STADIO Durbanville campus, with over 1,300 students. The STADIO Centurion campus sits at more than 2,300 students.

It can’t all be good news, of course. Milpark is lagging, which creates a negative impact on growth in distance learning numbers. In Namibia, there’s the announcement of free higher education at state-owned facilities that they need to contend with. Difficulties in the film industry also impacted student numbers in related courses.

But with 55,854 students on the books, STADIO is on track to achieve the promise made in the pre-listing statement of having 56,000 students by 2026. The bigger goal is to reach 80,000 students by 2030. They believe that they can grow to more than 100,000 students.

Ghost Bite: With the share price up 40% over 12 months and a P/E multiple of almost 30x, the STADIO growth story isn’t exactly an uncovered gem. The market puts a lot of faith in this management team and the track record of delivery shows you exactly why that is. Interestingly, the stock is nearly 16% off the 52-week high.

Results of previous poll:

Nibbles:

  • Director dealings:
    • The CEO of Life Healthcare (JSE: LHC) bought shares worth R11.3 million. The company has been struggling to get positive investor attention recently, so this is an important show of faith by the CEO.
    • The Deputy CEO of WeBuyCars (JSE: WBC) and an associate bought shares worth a total of around R436k.
    • Not a traditional director dealing, but still worth noting – the CEO of Fortress Real Estate (JSE: FFB), who is also a non-executive director of NEPI Rockcastle (JSE: NRP), has a loan for which shares in both companies are pledged. He’s increased the size of that facility from R34 million to R50 million. No additional shares in either company have been pledged.
  • Marshall Monteagle (JSE: MMP), one of the more obscure names on the JSE, released a trading statement for the year ended March 2026. HEPS has jumped tremendously from 2.2 US cents to 25.6 US cents. They attribute this to the equity portfolio and to currency movements. Detailed numbers are due for release on 26 June.
  • Balwin (JSE: BWN) still needs to release the circular related to the offer to shareholders by Bidco (backed by the PIC). The Takeover Regulation Panel (TRP) has granted an extension for the circular to be posted by no later than 17 July 2026. It’s not uncommon to see extensions like these.
  • The acquisition of Bank Zero by Lesaka Technologies (JSE: LSK) is taking longer than planned. The parties have agreed to extend the long-stop date from 6th August 2026 to 31st January 2027. Whenever a banking licence is involved, there are complex regulatory hurdles to jump over.
  • In a significant milestone for Capitec (JSE: CPI), Dr Chris Otto (one of the founding directors) will be retiring from the board on 31 July 2026. He’s literally been on the board since the very beginning, most recently in a non-executive capacity. What an extraordinary career!
  • Shuka Minerals (JSE: SKA) has reported another set of drilling results. They had to terminate the fourth drill hole at a shallower depth than planned due to the risk of losing equipment. Still, the CEO seems happy with the results in terms of the grades of the ore body.
  • I’m not convinced that it’s even worth mentioning, but Novus (JSE: NVS) has bought another R401.7k worth of shares in Mustek (JSE: MST). This takes the directly held stake from 50.39% to 50.44%. Inch by inch, hey.
  • If you are a shareholder in Visual International (JSE: VIS), then be aware that the company has scheduled the general meeting of shareholders for the RAL Trust transaction for 16th July. The circular should also be available, but I couldn’t find it on the website.

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

Marylou Greig
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0
Who’s doing what this week in the South African M&A space?

Listed Companies

enX is to dispose of the New Way Power (NWP) business and the related manufacturing site to GPR South Africa, a subsidiary of PRI, the ultimate beneficial owner of which is Generac, a company listed on the NYSE. The NWP sale business constitutes the largest asset in the enX portfolio. The purchase consideration of R220 million is subject to potential upward adjustment and is capped at R260 million to ensure a category 2 transaction. Power O2 which forms part of the broader power segment will be wound down and assets disposed of separately. The transaction is an opportunity for enX to realise value from the power segment at a time when market conditional and reduced levels of loadshedding have moderated earnings in the sector.

CA Sales is to acquire a collective 30% stake in The Digital Media Consultancy (TDMC) with the option to increase this shareholding by a further 21% to acquire control. TDMC is a local digital-marketing and e-commerce consultancy specialising in assisting the growth of consumer and retail brands. Financial details were undisclosed for the uncategorised transaction with the purchase consideration being paid from internal cash resources.

Mantengu has released a detailed cautionary on a proposed transaction which will see the disposal by Mantengu and the Blue Ridge minorities of their 70% and 30% shareholding in Blue Ridge to Afresources Mining, a diversified mining group owned and controlled by Gani Bros Equity. The R50 million disposal is a category 2 transaction and remains subject to completion of a due diligence as well as the conclusion of legal agreements.

Lesaka Technologies has extended the long-stop date for its 2025 R1,09 billion acquisition of digital lender Bank Zero. The deadline of 6 August 2026 has been extended to 31 January 2027 to allow the parties to obtain remaining outstanding regulatory consents.

The Takeover Regulation Panel has granted Balwin and Bidco an extension in terms of the distribution of the Scheme Circular to Balwin shareholders to no later than Friday, 17 July 2026.

Unlisted Companies

Pan-African private equity fund manager, ARM-Harith Infrastructure Investments, has announced the first close of its Successor Fund at c.$76 million. The fund, a multi-currency blend finance platform, is designed to unlock African institutional capital at scale and accelerate investment in energy transition and climate resilient infrastructure across sub-Saharan Africa.

South African USP&E, a power generation company delivering flexible power solutions has, together with BAM Energy, a local engineering consultancy, launched BridgePower Nuclear (BPN) – a power infrastructure model built around Africa’s industrial economy requirements. BPN’s proposed technology platform, the Pearl reactor, is to be phased in during 2029. The transportable unit is designed to address the barriers that have delayed small modular reactor programmes, namely the dependence on enriched fuel, reliance on heavy forgings and complex on-site construction.

Business Rescue practitioners for the SA Post Office (SAPO) announced this week that formal application had been made for the state-owned entity to exit its business rescue process. SAPO entered business rescue in July 2023. The caveat, however, is that the exit from the process will occur without the R3,8 billion in recapitalisation funds from National Treasury with the practitioners warning that the absence of the capital injection has resulted in certain aspects of the turnaround strategy being incomplete.

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

Brait has announced its intention to undertake a R2,5 billion rights offer as part of its strategy to unlock value for its shareholders by eliminating historical debt constraints and making way for the unbundling and distribution of its remaining assets. Brait will issue shares at R1.51 per share, representing a 25% discount to the five-day VWAP of R2.23 recorded prior to the announcement. The company has secured undertakings from Titan and its affiliates, who between them hold 39.3% of Brait’s ordinary shares, to underwrite the rights offer.

Following the results of the scrip dividend election, Dipula Properties will issue 19,041,044 new ordinary shares in the company in lieu of an interim dividend, resulting in a capitalisation of the distributable retained profits in the company of R128,53 million. The shares were based on a reinvestment price of R6.75 per share.

This week Novus acquired an additional 26,780 Mustek shares at R15.00 per share on the open market (outside of the Mandatory Offer) for R401,700. The company now holds 29,02 million Mustek shares constituting 50.44% of the issued shares in Mustek. Together with concert parties this shareholding increases to c.70.73%.

Numeral has received approval from the Stock Exchange of Mauritius to change its listing classification to the investments category. The approval provides the company with greater strategic flexibility to pursue its investment holding strategy, including the acquisition, incubation, management and development of operating businesses and strategic investments across multiple sectors and jurisdictions.

The JSE has advised shareholders of Brikor, Mantengu and Visual International that the companies have failed to submit their financial statements within the three months period as stipulated by the Listing Requirements. Should these companies fail to submit their financial statements before 30 June 2026, their listings may be suspended.

Business Rescue Practitioners have withdrawn the application for provisional liquidation of Tongaat Hullet which was filed on 12 February 2026. This follows a binding agreement by the parties involved to restructure the group. The Industrial Development Corporation, Tongaat’s largest creditor, will convert its R2,5 billion claim into equity, becoming a significant shareholder in Vision. In addition it will extend post-commencement finance to end-September 2026 to support Tongaat’s continued trading during the restructuring. The Vision consortium comprises Terris Sugar, Remoggo and Almoiz. Tongaat Hullet remains in Business Rescue.

This week the following companies announced the repurchase of shares:

Reinet Investments intends to repurchase its shares for an aggregate maximum amount of €500 million and a maximum of 16,5 million shares over a period up to the 2027 AGM. The implementation will be through a number of successive and separate programmes. Under the programme, Reinet will first commence a purchase programme for an aggregate €75 million subject to a maximum of 2,5 million shares over a period commencing 22 June 2026 and ending 19 August 2026. The Rupert family will not dispose of any shares during the duration of the programme.

ADvTECH has repurchased 5,740,128 shares on the open market over the period 30 March 2026 to 10 June 2026. The repurchase represents c.1.04% of the company’s issued share capital. The shares were repurchased in a price range of R40.47 to R44.90 per share for an aggregate R250 million. The shares will be cancelled.

Bytes Technology has announced in May 2026 its intention to implement a new share repurchase programme to purchase the company’s shares for an aggregate value of up to £25,0 million. This week the company repurchased 575,000 shares at an average price per share of £3.69 for an aggregate £2,12 million.

In December 2025, British American Tobacco extended its share buyback programme by a further £1.3 billion for 2026. The shares will be cancelled. Over the period 8 – 12 June 2026, the company repurchased a further 617,131 shares at an average price of £45.33 per share for an aggregate £27,96 million.

To reduce the share capital of the company and return capital to shareholders, Quilter commenced a £100 million share buyback programme. During the period 8 to 12 June 2026, Quilter repurchased a further 917,907 shares on the LSE with an aggregate value of c.£1,75 million and 234,470 shares on the JSE with an aggregate value of R9,81 million.

Ninety One plc announced an increase in the repurchase programme from £30 million to £55 million to be completed by 21 July 2026. The shares to be purchased on the open market will be cancelled to reduce the Company’s ordinary share capital. This week the company repurchased a further 898,835 ordinary shares at an average price 217 pence for an aggregate £1,95 million.

GreenCoat Renewables has implemented a share buyback programme totalling €100 million over 12 months with a first tranche amounting to €25 million beginning on 5 March 2026 – representing 13% of the issued share capital. This week 1,108,090 shares were repurchased for and aggregate €817,601.

Anheuser-Busch InBev’s US$6 billion share buy-back programme continues. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. During the period 8 to 12 June 2026, the group repurchased 532,602 shares for €37,24 million.

During the period 8 – 12 June 2026, Prosus repurchased a further 2,373,260 Prosus shares for an aggregate €94,5 million and Naspers, a further 904,340 Naspers shares for a total consideration of R795,78 million.

One company issued a profit warning this week: Crookes Brothers.

Two companies issued or withdrew a cautionary notice: Mantengu and Numeral.

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

Navigating contested takeovers

Sibonelo Mdluli
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Navigating contested takeovers

The Warner Bros. Discovery bidding war through a South African lens

The recent bidding war for Warner Bros. Discovery (WBD) – which pitted Netflix against Paramount Skydance and ultimately produced a US$110,9bn deal – is an interesting case study in contested takeover dynamics. While it played out under US takeover rules, the structural and governance tensions at its core are strikingly relevant to South African corporates.

  1. The WBD bidding war – a chronological overview

WBD entered 2025 burdened by substantial legacy debt and declining television revenues. In June 2025, management announced plans to split the business into two entities. The announcement signalled, explicitly or not, that the company was “in play”.

Following the announcement, multiple parties – including Netflix and Paramount Skydance – submitted formal proposals. In October 2025, WBD confirmed it was reviewing unsolicited offers and subsequently entered into exclusive negotiations with Netflix, culminating in a definitive agreement in December 2025.

The agreement with Netflix seemed to have closed the door on Paramount and other bidders. It had not.

Paramount did not withdraw. Instead, it launched what effectively became a protracted hostile campaign. By January 2026, Paramount had launched a hostile tender offer to WBD shareholders at $30 per share (a premium of about 139% to the undisturbed Netflix share price). WBD’s board rejected this bid and reaffirmed its support for Netflix.

Facing mounting shareholder pressure and governance scrutiny regarding whether it had adequately discharged its fiduciary obligations, WBD’s board opened a seven-day negotiating window with Paramount in late February 2026. Paramount responded with its ninth revised offer: $31 per share, all-cash, for the entire company, with a ‘ticking fee’ of $650 million per quarter for closing delays beyond 31 December 2026. On 26 February 2026, the WBD board determined that Paramount’s revised $110,9bn offer constituted a “superior proposal”. Netflix declined to increase its bid and withdrew, leaving Paramount as the winning bidder.

  1. Lessons for SA target company Boards

Lesson 1: Early constitution of the Independent Board
South Africa’s Takeover Regulations mandate that an “Independent Board” – comprising directors who have no conflicting interests in relation to the transaction – be constituted in relation to “affected transactions” to evaluate bids and make recommendations to shareholders. Affected transactions include control transactions and disposals of all or a greater part of a regulated company’s assets or undertaking. Whilst every situation has its own unique considerations, constituting the Independent Board early, with genuinely independent and commercially astute directors, is critical. Its composition will be scrutinised by the Takeover Regulation Panel (“TRP”), which is the primary regulator for affected transactions. Appointing directors who have pre-existing relationships with a bidder, or who hold material equity interests that skew their incentives, will attract TRP scrutiny and undermine the legitimacy of its ultimate recommendation.

As a matter of practicality, when strategic interest from potential acquirers is first identified – even at preliminary, non-binding stages – the board should already be mapping conflicts and identifying the Independent Board designates.

Lesson 2: Engage the TRP proactively, not reactively
The TRP is not merely a box-ticking regulator. It has broad supervisory powers over affected transactions. Boards that engage proactively with the TRP – briefing it on process, seeking guidance on novel structural questions, and ensuring key approvals are lined up in advance of key decision points – are in a far stronger position than those who appear before it under fire.

Lesson 3: ‘No-Shop’ does not mean ‘No-Engage’
One of the clearest lessons from the WBD saga is the risk of a board appearing to be a passive gatekeeper for the preferred bidder, rather than an active steward of shareholder value. In the WBD deal, WBD had signed up to market standard “no-shop” undertakings (i.e. undertakings to negotiate exclusively with Netflix and not to actively solicit interest from third parties). WBD’s board, while within its contractual rights to rebuff Paramount’s early bids, faced legitimate criticism that it was slow to test the market properly.

Under South African law, this tension is resolved by statute: the board cannot, as a matter of law, prevent a bona fide competing bidder from accessing information or from putting its case to shareholders. A board that attempts to entrench a preferred deal by refusing to engage with a higher competing offer risks not only regulatory sanction from the TRP, but also personal liability exposure for its directors under the Companies Act.

The fiduciary duty is to the company and ultimately its shareholders – not to the preferred bidder, however well-negotiated the initial deal was.

Lesson 4: Structure deal protections to survive a superior offer landscape
South African target boards and their advisers should ensure that deal protection mechanisms are carefully calibrated:
•Rights to match should have reasonable exercise periods – long enough to allow a genuine response, short enough not to chill competing interest.
•Break fees should compensate the preferred bidder for its transaction costs without being so large as to deter third-party interest. The TRP will not generally permit break fees in excess of 1% of deal value.
•“Fiduciary-out” provisions must be expressly preserved – these allow the board to change its recommendation or terminate an agreed transaction if a superior proposal emerges, when sticking with the original deal would breach its fiduciary duties.

Lesson 5: Shareholder engagement is not optional
A recurring theme in the WBD saga was the voice of institutional shareholders.

South African institutional investors have become significantly more activist. In a contested takeover, boards that communicate early, transparently and substantively with their major institutional shareholders will be better positioned to maintain trust and manage the process effectively.

Lesson 6: Secure the regulatory pathway before recommending
Anti-trust clearance is a mandatory step for South African M&A above applicable thresholds. The South African competition authorities have demonstrated a willingness to impose merger-specific and other public interest conditions relating to employment, localisation and supplier development, amongst others. In evaluating competing offers, target companies must assess the likely regulatory pathway for each. A higher offer that faces greater competition or public interest risk may deliver less certain value than a lower-priced offer with a cleaner regulatory profile. In South Africa, the length of time it has historically taken to obtain regulatory approvals has effectively acted as an impediment to hostile transactions. Understanding this dynamic, and designing the transaction in a way that mitigates it, is therefore essential to potential bidders looking to launch deals on an unsolicited basis.

Sibonelo Mdluli is a Senior Transactor | RMB Corporate Finance

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

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

Rethinking Africa portfolios: How multinationals can navigate divestments

Daniel Outré
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Rethinking Africa portfolios: How multinationals can navigate divestments

Too many multinational exits in Africa fail – not because of weak demand, but because the process is not adapted to the buyer universe.

Drawing on our experience as M&A advisors, we share practical reflections on what it takes to execute successful multinational exits from Africa, with a particular focus on how to manage the specificities of such processes in an African context.

A quiet but structural shift in Africa’s corporate landscape

Not long ago, Unilever was, by far, the leading distribution player in French-speaking West Africa, with large fleets of trucks serving small shopkeepers across the region. The group operated asset-heavy, vertically integrated businesses, combining manufacturing facilities with extensive palm plantations for edible oil and soap production. Two decades later, most of these assets have been divested to local players, following a series of headquarters-driven decisions, culminating in a near-complete exit from the region by 2026. Unilever is now largely absent from West Africa, including key markets such as Ghana and Nigeria, where subsidiaries have either been sold or wound down. Across these markets, the group has shifted from a dominant mass-market player – with 20% to 50% market shares, strong local brands and deep operational presence – to a lighter, more selective model focused on distributing a limited range of international brands targeting higher-income consumers.

The Unilever story is just one illustration of a broader structural trend, and this evolution is neither isolated nor cyclical. Similar dynamics can be observed across sectors. While the underlying drivers may differ – including capital allocation, regulatory complexity, foreign exchange constraints and compliance considerations – the overall direction is consistent. In banking, European institutions that once held significant market shares across North and West Africa have substantially reduced their presence following the disposal of subsidiaries by Société Générale, BNP Paribas and Crédit Agricole. In the manufacturing space, groups such as Air Liquide have divested multiple African operations – including the sale of 13 subsidiaries in 2024 – as part of broader portfolio rationalisation efforts. Comparable trends are visible in other sectors, including insurance, energy and cement, where several European players have scaled back or exited their positions.

Against this backdrop, divesting multinational assets in Africa has become both more frequent and more complex, requiring processes that are carefully structured and actively managed to succeed. The remainder of this note focuses on how such processes can be adapted to local market dynamics, based on our experience advising on these transactions.

Taking stock of the actual buyer universe for multinationals in Africa

A key starting point is that multinational assets in Africa are generally attractive and marketable, and can generate meaningful investor interest. The challenge is not the absence of demand – it is the structure of that demand. Yet many processes are delayed or weakened by recurring pitfalls, despite strong in-house M&A capabilities on the seller side. These transactions, therefore, require a specific approach, taking into account their African context.

A defining feature of the private sector in many sub-Saharan African countries is the relative lack of M&A market liquidity. A large portion of potential buyers are family-backed groups of limited to mid-scale size, and with varying degrees of sophistication and formalisation. Private equity funds and more structured regional players are also active, but few are structured to take controlling stakes, and even fewer are equipped to manage complex carve-out situations. In practice, this means that local family groups often constitute the most credible buyer universe for multinational divestments, requiring adjustments to both the positioning of the asset and the execution process. Local family groups tend to place significant value on the reputation, compliance standards and operational rigor associated with multinational assets. These assets often include long-established operations with valuable real estate, strong legacy brands and underexploited potential. Larger family groups with exposure to adjacent sectors are typically those best positioned to generate synergies and to submit the most compelling offers, particularly where assets require repositioning.

In Africa, the question is not whether there are buyers – it is whether the process is designed for them.

To address this reality, M&A advisors need to deploy a tailored toolbox. Their role is not limited to running a process, but also to designing a transaction perimeter that the market can effectively absorb. Multinational assets are often sizeable, relative to the financial capacity of local buyers, which may require restructuring the perimeter – through partial disposals, leverage optimisation or asset separation – to enhance affordability. This is particularly relevant for transactions with a significant real estate component, valuable intellectual property or a multi-country footprint, where a piecemeal approach may unlock greater value. While this increases execution complexity for the seller, it can significantly broaden the buyer universe and improve outcomes. Equally important, the gap in working cultures, transaction experience and M&A language between buyers and sellers can lead to misunderstandings and mistrust, which can, in turn, result in misinterpretations on both sides (e.g. information requests perceived as hesitation, or process discipline perceived as mistrust). In this context, the role of the advisor extends beyond execution to include active facilitation and, at times, buyer education. This is particularly true for technical aspects, such as Transition Services Agreements (TSAs), which are often critical in carve-out situations but may be unfamiliar to certain buyer profiles.

Navigating through other local parameters

Equally important, the seller must be fully aligned internally – across local management, regional teams and headquarters – on key parameters such as perimeter, valuation expectations, approval processes and fallback options. Misalignment at this level can quickly undermine execution. Other recurring aspects include the difficulty of transferring and repatriating funds, particularly for locally based buyers, with direct implications on transaction structuring, conditions precedent, escrow arrangements and timing. Regulatory frameworks may also lack clarity, increasing legal uncertainty around approvals and closing mechanics. These constraints can result in protracted timelines, with processes sometimes extending up to two years end-to-end – often twice as long as comparable transactions in more developed markets. Finally, confidentiality is also often an issue, as it is more difficult to preserve in an African context, with information leakages occurring more frequently. This is particularly sensitive for multinational sellers, who may be exposed to political interference or operate listed subsidiaries, increasing the potential impact of premature disclosures. In this context, communication planning should be treated as a core transaction workstream, rather than an afterthought.

Overall, Africa remains a distinct and sometimes challenging M&A environment for multinational companies. The key takeaway, however, is that the success of a divestment is rarely driven by the intrinsic quality of the asset alone, but by the ability to anticipate local constraints and structure the process accordingly.

The difference between a failed process and a successful exit is not the asset; it is the quality of the preparation.

Daniel Outré is a Partner | Enexus

This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.

DealMakers AFRICA is a quarterly M&A publication
www.dealmakersafrica.com

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