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Ghost Bites (HCI | MAS)

The Finance Ghost
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Ghost Bites (HCI | MAS)

HCI wants to sell Gallagher Estate and other properties to SACTWU, but it’s far from a vanilla deal (JSE: HCI)

Selling the properties is good in theory, but these terms are quite something

When I last wrote about HCI and its group companies in Ghost Bites, I pointed out a fundamental problem: the group’s most important cash cow is its gaming assets, and with the shift to online betting, casinos are producing less milk. To add to the pressure, HCI is investing in speculative plays like energy, which tend to be capital intensive with uncertain outcomes. This isn’t a great combination.

An obvious way to improve the balance sheet would be to sell off certain properties in the group that are sucking up capital and producing poor returns. For some reason, even in HCI subsidiary companies, there’s a love of holding unnecessary property assets. So, in theory, seeing a sale of assets like Gallagher Estate is positive. The bad news is that this disposal does absolutely nothing to improve HCI’s cash flow. In fact, it leads to a cash outflow.

How can that be? My read of it is that HCI has decided to solve the problems of the Southern African Clothing and Textile Workers’ Union (SACTWU) at the expense of other shareholders. Now, HCI’s history is firmly entrenched in the unions, so this shouldn’t come as a huge shock.

SACTWU currently holds 23.8% of HCI’s shares in issue. They aren’t managing to meet their financial obligations, so they keep selling HCI shares in the market, a situation that isn’t sustainable. There’s an argument to be made that this is an overhang on the HCI share price. I think it’s a weak rationale for a deal though, especially on these terms. Average daily value traded in HCI shares is below R10 million, so it would be difficult, but not impossible, for SACTWU to unlock that kind of value through on-market disposals.

Here’s part one of the deal: HCI (acting through an unlisted subsidiary called Squirewood Investments) will repurchase 1.1 million shares from SACTWU for R144.1 million at a price of R131 per HCI share. At the start of trade on the day of the announcement, the market price was R130.50 per share, so this is approximately the market price.

Yes, HCI with its balance sheet under pressure and with dicey core exposures will be parting with R144.1 million to buy its shares back at the market price, giving SACTWU a sweetheart deal of note to exit part of their position. Hmmm.

But what about the property disposals? Do those make up for it?

HCI will sell its shares and claims in Gallagher Estate, HCI Rand Daily Mail and HCI Solly Sachs House for SACTWU for R550 million. There will then be an agreement for Squirewood to purchase shares worth the same amount from SACTWU (once again at R131 per share). A cession agreement will essentially offset these amounts.

In other words, the R550 million doesn’t actually flow. HCI is repurchasing a ton of shares here and is offloading the properties. When all is said and done, SACTWU will hold 18.4% in HCI rather than the current 23.8%. Whether or not HCI would then look to dispose of the shares in the market or hold them as treasury shares is unclear.

Does this actually solve anything for SACTWU on a sustainable basis? The total value of the net assets is R510 million on the HCI balance sheet. As one of them is loss-making, they achieve net attributable income of just R5.5 million, which is an astonishingly bad return. It’s difficult to imagine that this makes such a difference to SACTWU.

Did you notice the price? It looks like SACTWU is paying a premium to the current net asset value on the properties, although this could just be because of an outdated valuation. Based on attributable net income though, the properties are either terribly mismanaged or just terrible, full stop.

Shareholders will have to approve this, with a special resolution required. SACTWU isn’t allowed to vote on the deal. I don’t personally like this deal and can’t see why HCI shareholders would rush to approve it, unless HCI has managed to sell the properties at an inflated price, with the balancing point being that HCI then needs to drip shares into the market to raise cash instead of SACTWU having to do that.

If shareholders believe that HCI’s shares are currently undervalued, then they will see this as a clever transaction that gives HCI flexibility down the line. Those with a more bearish take will be worried about the cash outflow at a time of weakness in the gaming industry, potentially creating further pressure for HCI down the line.

I can’t wait to read the independent expert report!

MAS makes the summary of the all-important joint venture agreement with PK available (JSE: MAS)

The “summary” is 17 pages long – and it delivers an important lesson

Webber Wentzel was appointed by MAS to summarise the joint venture agreement that is at the centre of a negotiation between MAS and Prime Kapital (PK). This is because the terms have come as a surprise to investors in terms of the difficulty that MAS is having in getting access to the cash in the joint venture. The summary is 17 pages long and is available here.

The joint venture was set up for development of property in Central and Eastern Europe, with PK appointed as the general partner of the joint venture. Importantly, there are reserved matters that require unanimous approval of the B ordinary shareholders (i.e. MAS and PK). When you see unanimous approval, be afraid. Be very afraid.

After all, joint control is just a different way of saying no control.

Ironically, MAS is actually better off for the unanimous approval requirement, as they only own 40% of the B ordinary shares despite having put in all the capital for the A preference shares. In other words, MAS signed up to put in far more capital than PK in the form of non-voting shares, while having very little in the way of ability to drive the direction of the joint venture due to a non-controlling stake in voting shares. From PK’s perspective, they have a controlling share of the voting shares, but this doesn’t amount to much due to the agreement.

My view on commercial agreements is that the risk capital should drive control. MAS should’ve had a controlling stake in the ordinary shares and there should’ve been some basic protections in place for PK, rather than the ability to veto dividends.

Let this be a lesson to anyone negotiating a deal where there’s an imbalance. I’ll reference that old wisdom: they who have the gold, make the rules. If you have the gold and you give someone else the power to stop you getting it, then you’re going to have a bad time.

Nibbles:

  • Director dealings:
    • A number of Dis-Chem (JSE: DCP) directors, including members of the founding family, sold shares worth R11.8 million in relation to various share awards. There’s one small sale that is referenced as being the taxable portion, so I assume that the rest is not just the taxable amount.
    • Sean Riskowitz bought shares in Finbond (JSE: FGL) worth R570k.
    • A director of a subsidiary of PBT Group (JSE: PBG) bought shares worth R36k.
  • As a reminder of how different the listing rules are in Australia vs. the JSE, Orion Minerals (JSE: ORN) has a halt in place on the Australian Stock Exchange (ASX) ahead of capital raising activities, but there’s no such halt in place on the JSE. The halt on the ASX will be lifted when Orion announces the results of the capital raise.
  • Vodacom (JSE: VOD) and Remgro (JSE: REM) have agreed to extend the longstop date for the fibre transaction to 18 July. With the Competition Appeal Court heading dates reserved for 22 to 24 July, that date will need to be extended again for the deal to stay alive. As we recently saw in the Sun International (JSE: SUI) – Peermont transaction, it’s not a foregone conclusion that parties will extend the date.
  • Burstone (JSE: BTN) announced that Jenna Sprenger will step down as CFO at the end of August 2025, after 12 years with the company. Myles Kritzinger, ex-CEO and CFO at Transcend Residential Property Fund, will take the CFO role at Burstone with effect from 1 September 2025.
  • After getting rid of their designated advisor, Mantengu Mining (JSE: MTU) has now appointed AcaciaCap Advisors to that role. In case anyone is keeping score, the share price is down 24% year-to-date and we still haven’t seen any concrete evidence of illegal behaviour in the market.
  • If you’re keeping an eye on the few remaining preference shares listed on the JSE, then be aware that Absa (JSE: ABG) is about to repurchase and delist its preference shares this month.

Dumb luck: the Timothy Dexter story

Dominique Olivier
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Dumb luck: the Timothy Dexter story

In a world obsessed with optimisation and five-year forecasts, there’s something deeply satisfying about success that arrives by mistake. Especially the kind that should have ended in disaster, but somehow didn’t.

Take Aspartame, for example. That sweet little zero-calorie miracle was never meant to flavour your diet soda. It started out as an experimental anti-ulcer drug. A student working in the lab at the time misunderstood an instruction to “test” the compound, and for reasons best left unexplored, decided to lick it off his finger. Instead of dropping dead, our hapless hero discovered that the substance was remarkably sweet. And just like that, Aspartame was born – not with precision or peer review, but with a lucky lapse in judgement.

History is full of these kinds of people; the ones who bumble their way into brilliance. But few ever did it with the level of confusion, confidence, and outright chaos as Timothy Dexter, a semi-literate, self-proclaimed philosopher who built a fortune by ignoring common sense and making every wrong move feel like a masterstroke.

Usually in this column, I try to tell stories that carry some kind of useful insight – a moral, a principle, perhaps even a profound takeaway about the nature of success or human behaviour.

This isn’t one of those stories.

What follows contains no useful advice whatsoever. I don’t recommend emulating a single thing you’re about to read. But I do suggest reading it out loud at your next family dinner. Because if ever there was a true tale that reads like fiction, it’s the saga of Timothy Dexter.

A quick note on facts and claims

In addition to his accidental business brilliance, Timothy Dexter also fancied himself a writer. This, as it turns out, is both a blessing and a bit of a problem.

On the upside, we have a firsthand account of his bizarre life, which is rare for an 18th-century eccentric. On the downside, his writing was a chaotic mess: no punctuation, erratic spelling, and endless self-praise. Historians still hotly debate whether he was joking, delusional, or both.

Author John P. Marquand tried to make sense of it all in Timothy Dexter Revisited, one of the few serious attempts to separate fact from fiction. Still, even with Marquand’s help, we’re left with a picture of a man who may have invented himself as much as he invented his fortune. What follows is therefore the story as far as we know and believe to be reasonably true. 

A frothy investment

Timothy Dexter wasn’t exactly what you’d call formally educated; in fact, his schooling ended almost before it began. By eight, he was labouring on a farm and by fourteen, he was knee-deep in hides and animal fat as a tanner’s apprentice. It was, by all accounts, an unglamorous start. But Dexter had two things going for him: blind optimism and an unshakable belief that he was destined for greatness. That, and a very fortunate marriage. In his early twenties, he wed a wealthy widow named Elizabeth Frothingham and used her fortune to set up a leather goods shop in Newburyport, Massachusetts.

Dexter did well enough from his shop to start entertaining bigger, stranger ideas. He began speculating, a word that in his case meant throwing money at wildly impractical ventures with the swagger of a man who definitely hadn’t done the maths.

One of his earliest gambles was buying up mountains of Continental currency. This was the paper money printed by the Continental Congress during the American Revolution. It had been so overproduced that, by the end of the war, it was practically worthless. Most people wouldn’t have accepted it as wallpaper. But Dexter, convinced he saw something others didn’t (a recurring theme), bought it by the cartload for pennies. Literally – pennies on the dollar.

Despite the fact that there were no indications that this might happen, Dexter reasoned that the government might one day change its mind and make the money redeemable again. And then in the 1790s, that exact thing happened. The newly minted US Constitution included a provision that allowed holders of Continental currency to trade it in for government bonds. And just like that, the man who had hoarded worthless paper like a magpie with a head injury became outrageously, accidentally rich.

Dexter’s critics (and there were many) called it dumb luck. And they weren’t wrong. But Dexter, ever the opportunist, took it as divine confirmation that he was a financial genius. Which was just the confidence boost he needed to start speculating on a much more daring scale.

First America, then the world

Flush with cash and positively dripping with confidence, Timothy Dexter did what any newly rich eccentric with delusions of genius might do: he built himself a small fleet of ships and launched an export business. This, despite the small logistical hiccup of being functionally illiterate and knowing next to nothing about international trade.

Instinct can only take you so far, especially when you’re surrounded by people actively trying to ruin you. You see, Dexter’s circle of “advisors” were less mentors and more saboteurs. Many were upper-crust merchants who resented his sudden, unearned rise and thought it would be hilarious to feed him terrible business ideas and watch him self-destruct. What they failed to account for, tragically, was Dexter’s supernatural ability to fail upwards.

Let’s take the time they told him to ship coal to Newcastle, a city famous for its massive coal reserves. Dexter sent a ship anyway, arrived during a miners’ strike, and sold out at a profit. Then came the bedwarming pans to the West Indies, where no one needed to heat their beds – so he rebranded them as molasses ladles and sold them to sugar plantations. Gloves to the South Sea Islands? Scooped up by Portuguese traders en route to China. Bibles to the East Indies? Bought by missionaries. Stray cats to the Caribbean? Solved a rat problem in a cinch.

Even his mistakes were profitable. He once hoarded whalebones, thinking they might be valuable for reasons unknown. Turns out, whalebone was soon in high demand for its use in corset stays. Women across America were cinching their waists with the remnants of Dexter’s latest blunder.

The inevitable autobiography

In 1802, Timothy Dexter decided the world needed his thoughts in print. The result was a self-published gem titled A Pickle for the Knowing Ones; or, Plain Truths in a Homespun Dress – a book that was part autobiography, part rant, and entirely unhinged. Inside, Dexter boasted shamelessly about his successes, aired grievances against his wife and various enemies, and did so with zero punctuation, chaotic spelling, and the kind of random capitalisation that suggests he was fighting the alphabet in hand-to-hand combat.

One baffled critic later described it as “a jumble of letters promiscuously gathered together,” which feels generous. Dexter gave the first edition away for free in Salem, Massachusetts, where it quickly caught on. The public, ever fond of a trainwreck, kept asking for more. The book was reprinted eight times, making it an accidental bestseller.

By the second edition, Dexter responded to critics’ demands for punctuation by adding an entire page filled with stray punctuation marks (just lines of dots, commas, question marks and the like) with instructions that readers could “peper and solt it as they plese.” Truly, a man ahead of his time in crowdsourced editing.

When Dexter died in 1806, his estate was valued at $35,027, which translates to roughly $922,957 in today’s money assuming you just increase it by inflation. While that’s not exactly a fortune (going by the state of his mansion and its grounds, Dexter was the kind of man who believed in spending his money), it’s still not bad for someone who wrote like a cat walking across a keyboard.

Was Timothy Dexter a madman, or a master of accidental strategy, or some type of unconventional business savant?

He referred to himself as “the greatest philosopher in the known world.” Historians tend to disagree. But what can’t be denied is this: Dexter made a good living by leaning into the absurd, the impossible, and the unadvisable – and somehow, it just kept working.

He wasn’t educated, but he understood the art of the pivot. He wasn’t a writer, but he sold books. He wasn’t respected, but he was remembered.

How many of his peers could claim the same?

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

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. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.

Ghost Bites (Alphamin | Capitec | Hudaco | Reinet)

The Finance Ghost
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Ghost Bites (Alphamin | Capitec | Hudaco | Reinet)

A solid quarter at Alphamin after their operational restart (JSE: APH)

The numbers look much better

After a rough time in Q1 2025 that saw a sequential drop of 31% in ore processed (i.e. vs. Q4 2024), Alphamin needed a strong recovery. Security concerns in mid-March had ruined that quarter due to an operational stop on 13 March 2025. Operations were only resumed on 15 April 2025. As you can imagine, this resulted in a decrease in production guidance for the year and a nasty outcome for the share price:

As you can also see, the share price has clawed back much of the losses. The production results for the second quarter should give further momentum to the recovery, as tin sales increased by 19% in Q2 vs. Q1. With steady tin prices and only a slight uptick in all-in sustaining costs, this means that EBITDA was up 21% sequentially. This is despite a 4% decrease in production.

With results like these, the balance sheet is looking much healthier. They’ve swung from a net debt position of $2 million to a net cash position of $50 million – that’s much more like it.

They can’t get back the lost time of course, but they are certainly doing their best.

Capitec’s credit rating has a positive outlook, but there’s a broader story here (JSE: CPI)

S&P had some good things to say about SA as a whole, to the benefit of all banks

Credit ratings don’t tell you much about equity returns, as credit rating agencies are focused only on downside risk, whereas equity investors need to consider the upside potential in the context of the down risk. The useful thing for equity investors is that a better credit rating means a lower cost of borrowing, which in turn puts more of the economics of the business in the hands of equity holders.

Capitec’s credit rating has been affirmed by S&P with a positive outlook. That’s not a surprise. The bigger surprise is the commentary from S&P about South Africa, which I’m going to repeat verbatim from the Capitec announcement because it’s so interesting:

“S&P Global Ratings (‘S&P’) revised their Banking Industry Country Risk Assessment (BICRA) anchor for South African banks upwards from ‘bb+’ to ‘bbb-‘based on their view that the South African banking system has transitioned into an expansionary phase and that the risk of economic imbalances has declined. S&P’s view is based on their expectation that real estate prices will increase moderately in nominal terms and that lending growth will remain cautious and mainly driven by infrastructure investments.”

Expansionary phase? Real estate prices up moderately in nominal terms? Infrastructure investments?!?

Look, I’ll take it. I’ll take it with a smile.

Revenue slipped at Hudaco and it’s apparently South Africa’s fault (JSE: HDC)

At least operating margin moved higher

Hudaco released results for the six months to May 2025. Revenue fell by 2.4%, with the company making many references to overall conditions in South Africa. Despite this, operating profit increased by 1.5% and operating margin moved up from 10.4% to 10.8%, so they managed to turn water into wine (and plenty of whine in the narrative).

By the time you get to HEPS, you find a jump of 19.6%. This is because of a fair value adjustment related to the Brigit Fire vendor liability. HEPS is good, but it doesn’t catch every single distortion. Helpfully, Hudaco disclosed comparable earnings per share without that adjustment, which increased by 6.1% (a solid outcome based on the revenue pressure).

Solid cash generation in the period supported an increase in the interim dividend per share of 7.7%.

Looking deeper, the segmental trend has continued: consumer-related products are under pressure with sales down 6% thanks to lower volumes. They saw a strong uptick in operating margin though, from 9.9% to 11.3%. In engineering consumables, sales fell by 1.2%, so the more resilient part of the business couldn’t find its way into the green in this period. Operating profit fell by 2% in that segment as margins went the wrong way.

The outlook statement continues to blame South Africa for Hudaco’s challenges. Whilst I don’t doubt that things aren’t easy, aren’t these executives being paid a great deal of money to find ways to create shareholder value despite the challenges? It always frustrates me when listed companies throw their hands up in the air, especially when the dividend payout ratio is just 37%. If you’re retaining two-thirds of shareholder capital, you need to do something with it beyond just complaining about South Africa. If you can’t figure that out, then pay a higher dividends.

Reinet has agreed to sell Pension Insurance Corporation – at a discount to Reinet’s NAV (JSE: RNI)

What will they do with all this money?

Reinet recently responded to speculation about a potential sale of Pension Insurance Corporation. They confirmed that they had been approached by a potential buyer. Things have subsequently moved quickly, with a subsidiary of Athora Holding (a European savings and retirement group) looking to buy Reinet’s entire 49.5% stake in Pension Insurance Corporation. This is part of a broader deal in which all shareholders in the company are selling to Athora.

Based on the March 2025 accounts, this stake was 53.7% of Reinet’s net asset value (NAV). This comes after they sold their British American Tobacco stake, leading to cash and liquid funds being 26.3% of Reinet’s NAV as at March 2025. The private equity and partnership investments were less than 20% of NAV, so this disposal turns Reinet into a group that will have so much cash once this transaction closes in 2026 that Johann Rupert might even need to sleep with his doors locked once more. We won’t tell Trump.

Reinet notes that the proceeds will be used for ongoing investment purposes. To deploy this extent of capital alongside the British American Tobacco proceeds, they must have a gigantic deal in mind. I really hope it won’t just be spread around the various investment funds they have already allocated capital to, as that will lead to Reinet trading at a substantial discount to NAV.

The price on the table is £5.7 billion for 100% of Pension Insurance Corporation. This implies a value of £2.8 billion for Reinet. They recognised the stake at a value of €3.7 billion as at March 2025, which converts to £3.2 billion at current exchange rates. In other words, Reinet is selling at a discount of 12.5% to the last value at which they carried it in their accounts.

Although they expect the price to tick up to £5.9 billion for the entire thing once dividends have been taken into account, we need to compare the current value to the NAV rather than the expected eventual price.

Discount aside, they have invested £1.1 billion in this stake over the years, starting with £0.4 billion in 2012. They’ve received £0.4 billion in dividends. That’s a net investment of £0.7 billion to get £3.2 billion out – not bad at all!

Nibbles:

  • The joke that is aReit (JSE: APO) continues. The company is suspended from trading because they haven’t done financials for the year ended December 2023. The reason? Their auditors are reliant on third party confirmations from auditors of some of their tenants, with an unclear timeline for this to become available. How on earth is a listed company in a position where they are reliant on auditors of tenants for their accounts to be done? Every possible warning sign was there when this thing listed. As regular readers may recall, I didn’t make myself popular when they came to market and I certainly have no regrets, as it turned out even worse than expected.

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

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

Exchange-Listed Companies

Trellidor has entered into an agreement with Sole Ceramics to dispose of the operations of Taylor Blinds and Shutters and NMC South Africa. The operations have failed to deliver to expectations and no synergies exist between these businesses and the core business Trellidor. The disposal tag is capped at R90 million with the proceeds to be allocated to reducing debt and strengthen the liquidity of the Group.

Hyprop Investments has disposed of a 50% stake in the Hyde Park Corner property to a subsidiary of Millennium Equity Partners for a consideration of R805 million with an option to dispose of/acquire the remaining 50% of the property to be exercised between 31 August and 30 November 2027. The proceeds will be allocated to reducing debt in the short term and for asset management initiatives, organic growth opportunities and new investments within Hyprop’s existing operations.

Fintech group Lesaka Technologies is to acquire Bank Zero Mutual Bank, the South African digital bank based on a zero-banking fees, in a deal valued at R1,1 billion. The transaction will be settled through the issue of shares (c.R1 billion) and up to R91 million in cash, resulting in the shareholders of Bank Zero holding a c.12% stake in Lesaka. The deal paves the way for a change in the way Lesaka will conduct its business, maximising synergies by combining Bank Zero’s digital banking infrastructure and operational banking licence with its fintech and distribution platform. The broader Bank Zero leadership team will remain in their current roles.

In a further announcement Lesaka Technologies advised that its Netherlands subsidiary Net 1 Applied Technologies had completed the sale of its entire equity interest in One Mobikwik Systems which is listed on the Indian Stock Exchange. The sale generated cash proceeds of US$16,3 million (R290 million).

EMedia (EMH) and Remgro subsidiary Venfin announced a transaction which will see eMedia take control of the entity EMI that holds its stake in e.tv., eNCA, OpenView and Yfm. The parties have agreed to a share swap whereby Venfin will exchange its 32.31% stake in EMI for 220 million EMH N shares, valued at R715,5 million. In addition, Venfin will subscribe 18,3 million EMH N shares at a subscription price of R3.25 per share amounting to R59,5 million – representing a 20% premium to the 30-day VWAP of 25 June. In due course, Remgro intends to distribute its EMH stake to its shareholders.

Reinforcing its strategic positioning in Spain, Lighthouse Properties has acquired a further shopping mall, adding Espacio Mediterràneo which is in Cartagena in the province of Murcia. The purchase consideration of €135,4 million reflects a gross asset yield of c.7.0% (before transaction costs).

Following press speculation that Reinet Investments was in talks regarding a possible sale of its 49.5% stake in Pension Insurance Corporation, the company confirmed that it had reached an agreement with Athora Holding, a European savings and retirement group managing €76 billion of assets on behalf of 2,8 million policyholders. The terms of the disposal imply a consideration payable for 100% of the fully diluted share capital of PIC of c. £5,7 billion which is expected to accrue to c.£5,9 billion, including expected dividends, ahead of closing.

Shareholders of Barloworld have been notified that the Independent Board has agreed to extend the acceptance date of the consortium’s Newco Standby Offer given that there are still a number of regulatory issues to finalise. As a condition to the extension, Newco has agreed to pay a break fee of R20 million to Barloworld if conditions are not fulfilled by the Longstop date. Acceptances currently stand at c.34.4% which together with shareholdings of the consortium and the Barloworld Foundation equates to 57.7% (excluding treasury shares) – above the 51% minimum requirement Newco stipulated it would need for the Standby Offer to be implemented.

In December 2023, Sun International South Africa announced the planned acquisition of the Peermont Group in an equity transaction valued at R3,24 billion (enterprise value of R7,3 billion). In October 2024 the Competition Commission recommended that the Competition Tribunal prohibit the deal. Fast forward to July 2025, the Tribunal is still to rule on the matter, this week issuing a date of 2 October 2025 for the hearing and closing arguments. The parties have extended the Regulatory Longstop Date over this period to accommodate a ruling but have now mutually agreed to the immediate termination of the proposed transaction as the hearing date falls beyond the latest Longstop Date of 15 September 2025.

Unlisted Companies

South African venture capital firm Knife Capital has announced investments in two local startups – Sticitt, a fintech innovator in school payments and Optique, a disruptor in the optometry space. The new Series A investments were made through its KNF II fund. Details on the size of investments were not disclosed.

Intengo Market, a South African digital platform enhancing liquidity, transparency, and price discovery, and offering tools and analytics to support the debt issuance and trading process, has acquired Addendum’s secondary market platform. The acquisition creates a comprehensive ecosystem for both primary and secondary debt markets by consolidating primary and secondary market functionalities into a single platform. Financial details were undisclosed.

In a significant milestone for South Africa’s maintenance, repair and overhaul (MRO) industry, Nordbak, a local specialist provider of MRO solutions with a strong foothold in mining, infrastructure and industrial segments has been acquired by Henkel in a strategic move to strengthen its Adhesive Technologies business in South Africa. Financial details were not disclosed.

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

In a pre-close update to shareholders Resilient REIT said while its investment in Lighthouse Properties remains a core component of its offshore strategy, the company had taken advantage of strong market conditions and disposed of a portion of the investment to fund the development pipeline. Resilient currently owns 27.6% of Lighthouse following the disposal of 39,2 million Lighthouse shares for proceeds of R332,2 million.

Castleview Property Fund has concluded a share subscription agreement with Select Opportunities Fund En Commandite Partnership in terms of which Castleview will issue a maximum of 30,487,805 shares at R6.56 per share for a maximum value of R200 million. The subscription price represents a 20% discount to the spot price of Castleview. Since the subscriber is a related party, an independent expert has been appointed.

PBT Group has declared a capital reduction distribution of 17.50 cents per PBT share to be paid to shareholders on 21 July 2025.

Efora Energy has advised of a further delay to 31 July 2025 in the release of its results for the year ended 28 February 2025, with the annual report anticipated by 31 August 2025. African Dawn has also advised delays saying it expected to publish its audited annual financial statements by 31 August 2025 and distribute its Annual Report by 30 September.

Shareholders have approved the intended Rights Offer by Accelerate Property Fund which aims to raise R100 million by way of a fully underwritten renounceable offer. The company will issue 250 million shares at R0.40 per share.

The JSE has advised that the following companies – African Dawn Capital, Brikor, Copper 360, Efora Energy, Visual International and Sable Exploration and Mining – have failed to submit their annual report within the four-month period stipulated in the JSE’s Listing Requirements. Should they fail to submit their annual reports before 31 July 2025, their listings may be suspended.

This week the following companies announced the repurchase of shares:

Following the closing of the Viterra/Bunge merger announced in June 2023, Glencore received 32,8 million shares in Bunge, representing 16.4% of the enlarged company. Glencore is of the view that the NYSE-listed Bunge shares represent surplus capital. The shares have a current market value of c.US$2.63 billion, the value of which (up to $1 billion) the Group intends to use to underpin a new buyback programme.

Pan African Resources has commenced the share buyback programme announced in early June 2025. The programme will take place on the AIM Market of the LSE and the JSE with c.R200 million (c.£8,2 million) to be purchased across both exchanges. This week 420,317 shares were repurchased at an average price of 46.89 pence per share for an aggregate £197,087.

In October 2024, Anheuser-Busch InBev announced a US$2 billion share buy-back programme to be executed within the next 12 months which will result in the repurchase of c.31,7 million shares. 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 23 to 26 June 2025, the group repurchased 786,256 shares for €46,69 million.

Hammerson plc continued with its programme to purchase its ordinary shares up to a maximum consideration of £140 million. The sole purpose of the buyback programme is to reduce the company’s share capital. This week the company repurchased 213,431 shares at an average price per share of 299 pence for an aggregate £639,931.

In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is to be funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 639,622 shares at an average price of £34.41 per share for an aggregate £22 million.

During the period 23 to 27 June 2025, Prosus repurchased a further 3,379,017 Prosus shares for an aggregate €160,83 million and Naspers, a further 434,976 Naspers shares for a total consideration of R2,39 billion.

One company issued a profit warning this week: Visual International.

During the week two companies issued or withdrew cautionary notices: ArcelorMittal South Africa and Blue Label Telecoms.

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

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

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

DealMakers AFRICA

Miro Forestry and Timber Products, a sustainable forestry and plywood manufacturing company employing over 4,000 people in Sierre Leone and Ghana, has secured new funding in a round led by Lagata, a specialist in forestry investment. Existing shareholders British International Investment, FMO, and Finnfund, as well as Mirova are also participating in the new capital raise.

West African mobile money platform, Wave Mobile Money, has raised US$137 million in debt financing. The funding round was led by Rand Merchant Bank and included British International Investment, Finnfund and Norfund. Wave operates in eight markets across Africa and will use the funding to boost working capital and drive expansion across existing and new markets.

Kenyan mobi-tech startup, BuuPass, has secured investment from Yango Ventures the corporate venture capital arm of global ride-hailing and tech conglomerate Yango Group. BuuPass offers a comprehensive platform that enables users to book buses, trains, flights, and parcel delivery services, while also equipping transport operators with back-office tools for managing inventory, payments, and fleet logistics.

Persea Oil, an avocado oil processing company operating in Kenya and Tanzania has secured a US$1 million loan facility, comprising $500,000 for working capital enhancement and a $500,000 for capital expenditure, from Sahel Capital through its Social Enterprise Fund for Agriculture in Africa (SEFAA).

Egyptian agri-fintech, AgriCash, has raised an undisclosed amount in seed funding in a round led by Alex Angels that also included participation by regional investors. Founded in 2024, AgriCash provides farmers with a digital financing platform offering AI-powered agronomic insights, crop insurance, BNPL financing, and access to markets. The new capital will help scale operations across Egypt and expand into regional markets, enhance its AI-driven infrastructure and finalise integrations with key insurance and financial partners.

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

Merging ahead: Navigating South Africa’s complex competition landscape

Dudu Mogapi and Sidrah Suliman
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Merging ahead: Navigating South Africa’s complex competition landscape

The last quarter of 2024 and the beginning of 2025 were marked by a flurry of activity from the South African competition authorities, signalling a shift from their recent overemphasis on the public interest effects of mergers to age-old competition considerations. This is evident in the Competition Commission’s publishing of guidelines on indivisible transactions and internal restructurings, and the prohibitions of the Vodacom/Maziv and Peermont/Sun International transactions.

The guidelines seek to clarify the Commission’s approach to evaluating complex transactions, and provide certainty on how the provisions of the Competition Act 89 of 1998 (the Act) would apply in certain scenarios. Together with the recent prohibitions, they have notable implications for businesses.

Guideline on indivisible transactions

In September 2024, the Commission issued final Guidelines on Indivisible Transactions. These are intended to provide transacting parties with guidance on how the Commission will evaluate whether two or more transactions can be filed with it under a single merger notification, where each transaction – if treated separately – may constitute a merger. The guidelines outline several factors the Commission will consider in determining whether two or more transactions are interdependent and indivisible. Typically, transactions are interdependent and indivisible where each transaction would not be implemented without the other transaction. Importantly, the indivisibility must be shown on a factual and/or legal basis. The factors are not exhaustive and do not take away the Commission’s ultimate discretion, so the Commission will continue to consider each matter on a case-by-case basis.

Guidelines on internal restructuring

The Commission published the final Guidelines on Internal Restructuring on 4 April 2025. For a long time, the legal position on whether internal restructurings require merger approval before implementation has been uncertain, and the Commission has often (but not consistently) relied on case precedents of the Competition Tribunal and Competition Appeal Court to determine its approach to internal restructurings. The purpose of the guidelines is to bring more certainty to the Commission’s approach. The guidelines confirm that notifying an internal restructuring may be required only in limited circumstances. As a point of departure, the Commission will examine the current control structure, and that which will exist after the restructuring has been implemented. The emphasis seems to be on the effect an internal restructuring may have on external minority shareholders. For restructuring transactions not to trigger any notification requirements, the intra-group reorganisation must not change the control rights of external minority shareholders. The Commission also recognises the different formats in which internal restructurings can be structured. Accordingly, transacting parties must have due regard for the Commission’s approach when reorganising internal structures.

A re-focus on competition concerns?

The Tribunal recently issued its reasons for prohibiting the transaction involving South Africa’s largest mobile operator, Vodacom, and one of the country’s largest fibre infrastructure players, Maziv, due to its findings that “the proposed transaction’s anti-competitive effects will be permanent”. The Tribunal agreed with the Commission’s recommendation that the proposed public interest commitments offered by the parties were not merger-specific, and weighed them against the anti-competitive effects of the merger. The Tribunal found that the overall net effect of the proposed transaction would be negative. The lengthy investigation period (approximately 36 months), voluminous record comprising nearly 22,000 pages, and the Tribunal’s 350-page reasons issued five months after its order, testify to the complexities of the case and the authorities’ balancing of competition effects and public interest considerations.

Separately, in the Peermont/Sun International transaction, the Commission found that the proposed merger would significantly reduce competition in the casino gambling services market in South Africa and has recommended its prohibition. The proposed transaction would reduce the number of national casino operators from three to two, which would cause a further increase in concentration in an already highly concentrated market. Similarly, the investigation took approximately six months. The Tribunal has yet to hear the matter since the Commission recommended its prohibition in October 2024 *.

Final thoughts

Although not binding, the guidelines should be carefully considered by businesses when structuring transactions intended to be notified as single mergers or internal restructurings. When considering a transaction that may have competition concerns, it is vital for businesses to remember that offering a plethora of public interest commitments may not necessarily overcome the anticompetitive effects of a merger.

*This week the parties mutually agreed to the immediate termination of the proposed transaction given that the tribunal’s approval was a condition precedent to the proposed transaction. The hearing date of 2 October 2025 falls beyond the Longstop date of 15 September 2025 – ed.

Dudu Mogapi is a Partner and Sidrah Suliman an Associate | Webber Wentzel

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

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

The untapped power of M&A to save Kenyan businesses

Martha Mbugua
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The untapped power of M&A to save Kenyan businesses

Mergers & Acquisitions (M&A) are gaining traction in Kenya, as businesses look for strategic ways to navigate financial pressures and unlock growth opportunities.

M&A activity in Kenya has seen a notable upsurge over the past two years, marking a strong rebound from the slowdown caused by the COVID-19 pandemic. Meanwhile, the World Bank forecasts a 5.2% economic growth rate for Kenya between 2024 and 2026, driven largely by a strengthening private sector and rising business confidence.

While still relatively underutilised in Kenya, M&A offers a structured path for companies to restructure debt, preserve operations, and protect stakeholder interests. It prevents catastrophic liquidations and is seen as a viable business rescue strategy. But for an M&A deal to work for this purpose, compliance with Kenya’s legal framework is essential.

The Insolvency Act sets out the steps that distressed companies must take, beginning with notifying creditors and seeking their approval for proposed restructuring plans. Regulatory oversight is then provided by bodies such as the Competition Authority of Kenya (CAK), which evaluates the deal against certain thresholds and sector-specific regulators.

Most critical of all, the interests of creditors, shareholders and other stakeholders must seamlessly align. It is up to the company directors to ensure that the deal is in the best interest of all parties, balancing debt repayment while preserving operational value.

The benefits of M&A are clear, but the path to get there is not without its challenges.

Time sensitivity is a major hurdle. For companies on the brink of insolvency, delays can exacerbate financial decline, leaving little room for thorough due diligence or optimal deal structuring. Negotiations in distressed scenarios are equally complex. Multiple stakeholders, each with differing priorities, must find common ground. Then, parties must wade through one or more regulatory approval processes that seriously slow down transactions, further compounding time pressures.

Debt restructuring is another critical factor. Many distressed companies carry significant liabilities, making it challenging for shareholders to negotiate favourable terms. Creditors may resist debt-to-equity conversions or extended repayment plans, which can undermine the viability of a deal.

Debt restructuring often forms the backbone of distressed M&A transactions. Common approaches include debt-to-equity swaps, extended repayment terms, or asset-based settlements. These strategies reduce the financial burden on the distressed company, while ensuring creditors recover part of their investment.

Historically, liquidation and receivership have been the go-to solutions, but M&A presents a compelling alternative. By leveraging partnerships, attracting private equity investment, and embracing innovative debt solutions, companies can turn potential collapse into an opportunity for revitalisation.

With increased activity from private equity firms and venture capitalists in Kenya, the value of scooping up distressed businesses becomes clear as there is untapped potential. These are the investors who add operational expertise on top of their capital, adding real weight and intention to the turnaround.

For Kenyan businesses, particularly small and medium-sized enterprises, it’s time to take comfort in M&A. In truth, even the most financially troubled local firms can attract investment and acquisition interest, so long as they present a compelling value proposition and align with strategic goals.

No more is M&A a tool reserved for multinational corporations. It is a viable strategy for homegrown companies seeking survival, growth and renewal. With careful planning, transparent communication and a willingness to adapt, businesses can unlock the potential of M&A.

As business evolves, it’s not farfetched to see M&A becoming a cornerstone for reshaping industries, saving jobs and revitalising key sectors. For forward-thinking leaders, the time to explore M&A as a strategic solution is now. By embracing this approach, Kenyan businesses can navigate financial distress with confidence, ensuring long-term sustainability in an increasingly competitive market.

Martha Mbugua is a Partner in Corporate & Commercial | CDH Kenya

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

Ghost Bites (Bytes Technology | Castleview | Goldrush | KAP – Sasol | Sun International)

The Finance Ghost
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4
Ghost Bites (Bytes Technology | Castleview | Goldrush | KAP – Sasol | Sun International)

Bytes Technology tanks after flagging a weak first half (JSE: BYI)

This feels like a massive overreaction from the market

The market clearly got a shock from the Bytes Technology AGM statement, with the share price shedding nearly a third of its value in response to comments about the recent performance. It’s very unusual to see a drop of this nature from something as “tame” as an update at the AGM.

The problem is that Bytes is seen as a growth stock, so any disappointment in growth is a big deal for the share price. There’s some fluffy stuff in the announcement, suggesting that changes to the sales division haven’t gone as smoothly as they had hoped. On top of this, the negative change to the Microsoft enterprise incentives structure has been felt in this period, with the positive impact expected to come through in the second half.

The combined impact of these issues is that gross profit is expected to be in line with last year and operating profit is expected to be marginally lower. That’s ugly. But has the market overreacted here?

The AGM also includes a comment that normalised growth is expected in both metrics in the second half, so a 30% drop in the share price seems rather wild to me.

Interim results will be out in October. In the meantime, shareholders have this chart to chew on:

Castleview’s controlling shareholder to invest another R200 million in the group (JSE: CVW)

The pricing means that an independent expert is needed

Castleview Property Fund may not have any liquidity in its stock right now, but they are building a formidable portfolio of listed and unlisted assets. I can’t help but think that they are preparing for a major acquisition. I’ve noted before that the parties sitting behind the underwriter of the current Accelerate Property Fund (JSE: APF) rights offer are also the controlling shareholders in Castleview, so watch this space.

In the meantime, Castleview has further increased its balance sheet with a R200 million specific issue of shares to Select Opportunities Fund En Commandite Partnership. More importantly, this is a related party transaction, as the general partner of that partnership is a subsidiary of the ultimate holding company of Castleview.

The shares are being issued at a 20% discount to the spot price of Castleview shares, so they will need to get a fairness opinion from an independent expert for this to go ahead. The nuance is that Castleview’s share price is highly illiquid, so the last traded price is a very poor reflection of the underlying value of the group. The independent expert opinion will shed light on the value of what has been built thus far.

Goldrush responds to the noise around the National Lottery Licence (JSE: GRSP)

There’s been plenty of media focus on the recent award

Goldrush is a 50% shareholder in the Sizekhaya consortium, which is the entity that has been granted the licence to operate the National Lottery for an 8-year period from June 2026. This licence is given by government and is highly politically charged as a result. Notably, Goldrush’s stake will drop to 40% once the requisite shares are issued to a government entity, a decision that gets made by the Minister of Trade, Industry and Competition. Again, government firmly has a seat at the table here.

Because of the parties involved and the fraught relations in local politics, allegations are flying around faster than those lottery balls in the early days when Nimrod Nkosi entertained South Africa with live lotto draws. This was before we all had Netflix and better quality entertainment, of course.

On a serious note though, Goldrush has responded to the speculation. The overarching key point is that the parties in the consortium were legally and independently vetted and approved, which means that Goldrush and its partners followed the correct governance approach. The legal advisors in this regard were Cliffe Dekker Hofmeyr.

The storm seems to focus on Khumo Bogatsu, the sister-in-law of Deputy President Paul Mashatile. Bogatsu is an advocate of the High Court and has a 1.6% holding in Sizekhaya. Goldrush notes that there were no legal impediments to her participation in the consortium.

Based on the announcement, it looks as though allegations have also been flying around about Goldrush’s relationship with members of the bid evaluation committee. The company points out the practical reality that gaming is a small industry with only a few licence holders and regulators who get heavily involved in what’s going on out there, so it’s logical that the various players have come across each other professionally before.

A final interesting point in the announcement is that this is the first time that South Africans can invest in ownership of the lottery operator by buying shares in Goldrush. With a 25% year-to-date increase in the share price, that message seems to have already landed between the ears of small cap enthusiasts in the market.

KAP and Sasol are having a fight (JSE: KAP | JSE: SOL)

Will the Competition Commission actually behave like a competition regulator here, or use this as a good excuse for some new B-BBEE rules?

The word “competition” sometimes works quite hard in the Competition Commission name, as some of the rulings we’ve seen in recent years have looked more like a B-BBEE crusade than anything else. The problem is that the regulator has a broad “public interest” mandate and they tend to interpret that as a good excuse for forcing B-BBEE requirements on companies even when those requirements aren’t necessary by law. You can imagine how much this encourages things like foreign investment in South Africa.

But thanks to KAP’s subsidiary Safripol, as well as Sasol, we will now see the regulator respond to an actual competition issue – how refreshing! The issue stems from Sasol’s position as the monopoly supplier of ethylene in South Africa, a primary raw material in Safripol’s manufacturing of polypropylene and high-density polyethylene.

The parties are currently in dispute over the pricing of ethylene – a dispute that has recently progressed to independent arbitration. They are also arguing over the supply volume commitments in the supply agreement. Things have now escalated, with Safripol lodging a complaint with the Competition Commission regarding Sasol’s conduct. Safripol is also seeking relief for the preservation of the status quo in terms of the supply agreement i.e. a way to stop Sasol from changing any of the terms.

5 bucks says the Competition Commission’s initial process includes asking each party for their latest B-BBEE certificate – anyone want to take that bet?

Sun International has given up on the Peermont deal (JSE: SUI)

And with the current trend for major casinos, that’s probably a good move

Sun International has been in the process of trying to acquire the Peermont business (which includes flagship asset Emperors Palace) since the end of 2023. This deal was always going to be tough from a regulatory perspective, as this would be a merger of competitors in an industry that is highly regulated and faces constant scrutiny in terms of its impact on society.

In October 2024, the Competition Commission (the first port of call in the regulatory process) recommended to the Competition Tribunal that the deal be prohibited. Although the Tribunal has the power to go against that recommendation, it’s rare to see.

It takes forever for the hearing dates to be set, with the Competition Tribunal being willing to have the hearing and closing arguments on 2 October 2025. This gives Sun International a way out of the deal, as the longstop date is 15 September 2025 and it’s therefore impossible for conditions to be met by then.

In reality, I think Sun International choosing to rather walk away from the deal is a lucky break. The investment case for casinos has deteriorated rapidly in the past 18 months based on growth in online gambling. The last thing they actually need is another large casino.

The market seems to agree, with Sun International closing 8% higher in response to the news. Sucks to be the shareholders of Peermont.

Nibbles:

  • Director dealings:
    • Capitec (JSE: CPI) co-founder Michiel le Roux has put in place a new put-call option structure over shares with a current market value of nearly R2.4 billion. The put strike price is R2,826 and the call strike price is R4,680. These are short-dated options, with a weighted average expiry of 1.37 years. The current spot price is around R3,555.
    • The CEO of Life Healthcare (JSE: LHC) bought shares worth R3.1 million.
    • Three directors of major subsidiaries of Capital Appreciation (JSE: CTA) received share awards and sold the whole lot, worth almost R2 million in aggregate.
    • Christo Wiese is buying up more shares in Brait (JSE: BAT), this time to the value of R421k through Titan Premier Investments.
    • The CEO of Vunani (JSE: VUN) bought shares worth R205k.
    • A director of Trematon (JSE: TMT) sold shares worth R31.5k.
  • Glencore (JSE: GLN) announced that the merger of Viterra with Bunge Global has now closed. This means that Glencore owns 16.4% of Bunge in its enlarged form, as well as $900 million in cash. This gives Glencore far too much equity on its balance sheet, so they are commencing a share buyback programme of up to $1 billion.
  • The drama at Mantengu Mining (JSE: MTU) continues, with the company deciding to terminate the services of Merchantec Capital as its Designated Advisor. They will now look for a new Designated Advisor. It’s like someone bought Mantengu a book on 1001 Ways to Increase Your Risk Rating and they are working through it step by step. Maybe there’s a “ta-da!” moment at the end of all this, where they reveal that they were right all along. I somehow doubt it though.
  • Blue Label Telecoms (JSE: BLU) has renewed the cautionary announcement related to the strategic review and potential restructuring of the group, which could well include a separate listing of Cell C. At this stage, they are working with advisors to put together the optimal restructuring plan. Blue Label’s balance sheet is incredibly complicated, so they have much to think about with this.
  • Here’s something a bit unusual: Astoria (JSE: ARA) has entered into a CFD trade over its own shares to the value of R7.9 million based on the CFD price of R6.721 per share. This gives the company exposure to its own share price. This is a different approach to doing a share buyback, for example.
  • Southern Palladium (JSE: SDL) announced that the period for any objections to the granting of an environmental authorisation for the mining right at Bengwenyama has now lapsed, with no objections having been raised. This milestone has therefore been achieved. The next big one is to complete the optimised pre-feasibility study, which they hope to release in early July.
  • Nu-World (JSE: NWL) has appointed Ravi Rugbeer as the new CFO. In an unusual structure though, Graham Hindle remains as Financial Director.

Ghost Bites (Hyprop | Primary Health Properties – Assura | Trellidor)

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

Hyprop unlocks more capital – but what will they do with it? (JSE: HYP)

There’s no mention in the announcement of a MAS-related plan

Hyprop is disposing of a 50% share in Hyde Park Corner for R805 million. The timing of this is what makes it so interesting, as Hyprop raised a similar amount in a recent rights offer. The rights offer cash has already landed of course, whereas the disposal proceeds will take a while to come through.

Are these corporate actions completely unrelated? Would this disposal have happened regardless of the rights offer and a potential attempt to acquire MAS? As Hyprop has yet to commit to any kind of offer for MAS, I think this disposal has probably been in the works for some time anyway. There’s also no mention of MAS in the disposal announcement, other than an overall comment that Hyprop is looking to allocate more capital to not just the Western Cape, but also to Eastern Europe. But then to squash any thoughts of a MAS deal, they note that these proceeds from the Hyde Park disposal are for new investments within Hyprop’s existing operations, rather than acquisitions. Hmmm.

The buyer is Millennium Equity Partners, an unrelated party. The disposal yield is capped at 8.75%, reflecting the premium nature of this property.

As for the other 50%, there will be a call and put option structure in place that gives Millennium Equity Partners a route to control. The option can be exercised at any time in September to November 2027.

This is great and all, but what I would really like to see is some clarity on what Hyprop plans to do with the rights issue cash that is currently burning a hole in shareholders’ pockets in the form of cash drag.

Primary Health Properties shareholders give the green light to the Assura deal (JSE: PHP | JSE: AHR)

This is the first of many important steps

Large corporate transactions come with a number of conditions, including shareholders on both sides of the equation being happy with the deal. The good news for the proposed merger of Primary Health Properties and Assura is that the former’s shareholders have given strong approval for the deal. In fact, around 99% of them voted yes!

This sends a strong message to Assura shareholders – and perhaps the message is that the deal is too favourable from the perspective of existing Primary Health Properties shareholders? I still think that the premium above the alternative cash offer from KKR and Stonepeak wasn’t high enough, but the Assura board thinks otherwise. What really matters is what Assura shareholders will think when they vote on the deal.

Trellidor disposes of Taylor Blinds and NMC South Africa

But don’t be fooled by the share price closing 19% higher

You have to be very careful when looking at how the share prices of illiquid stocks react to news. If you just have a cursory look, you’ll see news of a major disposal by Trellidor and a share price that closed 19% up, so it’s easy to assume that the market loved it. The next things you need to look at are (1) the time the SENS came out vs. when the stock traded and (2) the volumes on the day vs. the average.

At Trellidor, the volumes on Tuesday were firmly in line with averages and the stock traded at 9am, well before the announcement came out at 11:30am. The jump is therefore based on the bid-offer spread, not the announcement.

Now, this isn’t to say that the Trellidor announcement isn’t good news. They are getting out of a business that isn’t a good strategic fit with their security offering, unlocking up to R90 million in the process for a reduction in group debt and other purposes. Trellidor has been really struggling, so this gives them some breathing room and renewed focus.

For context, in the six months to December 2024, Taylor Blinds and NMC achieved attributable profit before tax of R8.9 million in total. If we ignore debt and just take the tax off, that’s around R6.4 million in interim profit or R12.8 million on an annualised basis. This suggests a Price/Earnings multiple of roughly 7x on the disposal, so I’m not surprised that they took the money and ran – after all, Trellidor as a group is only trading on a Price/Earnings multiple of 4x!

Nibbles:

  • Director dealings:
    • The Discovery (JSE: DSY) directors are back to make you feel poor, this time with a sale of shares by Barry Swartzberg to the value of R161 million as part of a hedging and financing arrangement. As I always remind you with these sales, they are related to the strike price on the underlying options rather than a bearish view on Discovery.
    • One of the long-standing top executives at Investec (JSE: INL | JSE: INP) sold shares worth around R22.5 million.
    • A director of Argent Industrial (JSE: ART) sold shares worth R8.8 million.
    • Although most of the directors and execs at The Foschini Group (JSE: TFG) sold only the taxable portion of their awards, there were two who sold their entire awards worth R3.7 million.
    • The profit-taking at Santova (JSE: SNV) continues, with a sale by a director to the value of R2.65 million.
    • There’s yet more selling by the managing director of the feed business at Astral Foods (JSE: ARL), this time to the value of over R1.1 million. At the moment we’ve only seen selling from one prescribed officer at Astral, so that’s a less bearish signal than selling by numerous execs and directors.
  • Property developer Acsion (JSE: ACS) may have a R2.4 billion market cap, but liquidity in the stock is far too light for meaningful institutional activity. For retail investors who like to play in the wide bid-offer spread though, the company has achieved a revenue increase of 6.4% in the year ended February 2025 and a jump in HEPS of 29.5%. The final dividend is up from 18 cents per share to 20 cents per share.
  • Impala Platinum (JSE: IMP) has decided to consolidate its Impala Platinum and Impala Bafokeng Resources operations into a single structure. This is mainly a housekeeping thing, with some cost synergies along the way. Although they aren’t explicit about it, I suspect that there will be some savings from duplication of roles as well.
  • Shuka Minerals (JSE: SKA) has given an update on its acquisition of Leopard Exploration and Mining, as well as the Kabwe Zinc Mine in Zambia. The company has increased the loan facility with its second largest shareholder, Gathoni Muchai Investments, giving Shuka enough cash for the final payment to the sellers of the assets and the initial exploration work at the Kabwe Mine. Combined with the parties agreeing on how the share-based consideration will be settled, this means that the deal can close as soon as possible.
  • Supermarket Income REIT (JSE: SRI) has raised £215 million in bank debt for its joint venture managed by Blue Owl Capital. Priced at a margin of 1.5% above SONIA, this is an interest-only facility that has two further one-year extension options at the discretion of the lenders (a consortium of banks).
  • There is absolutely no trade in Numeral Limited (JSE: XII), so results for the year ended February 2025 get only a passing mention here. The year-on-year moves are huge, as the business has been making acquisitions. The group generated a profit of $182k for the year, which means HEPS of 0.014 US cents.
  • Back in March this year, Safari Investments (JSE: SAR) announced the disposal of Safari Investments Namibia to Oryx Properties. The deal has now become unconditional and was implemented with effect from 30 June.
  • As part of the leadership handover at Sun International (JSE: SUI) outgoing CEO Anthony Leeming has resigned from the board. He will remain with the company until the end of December 2025 to assist the new CEO, Ulrik Bengtsson, who has been appointed as a director with effect from 1 July.
  • Stefanutti Stocks (JSE: SSK) announced that the period for fulfilment of suspensive conditions for the disposal of SS-Construções (Moçambique) Limitada has once again been extended to 8 July 2025.
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