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.
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.
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.
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.
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.
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.
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.
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.
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 isthe 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.
AECI’s margins are heading in the right direction (JSE: AFE)
Thesame can’t be said for revenue, unfortunately
AECI has released a voluntary trading update for the five months to May 2025. The group is following a turnaround strategy, which means absolute focus on improving margins and actively managing the business portfolio. A good example of this would be the Much Asphalt disposal for R1.1 billion, along with the restructuring of AECI Schirm Germany (which has been a major headache and which they hope to bring to a cash breakeven position in the second half of the financial year).
In this period, the South African business posted disappointing numbers, while the international operations did better year-on-year. This means that the turnaround efforts are running behind expectations overall. On the plus side, year-to-date EBITDA is up 12% despite a 2% decrease in revenue, with EBITDA margin up 200 basis points to 10%.
It further helps that net finance costs were 40% lower thanks to the proceeds received on the Much Asphalt disposal. Net debt has dropped from R4.7 billion as at May 2024 to R3.4 billion as at May 2025. This is a 1.1x net debt to EBITDA ratio, which means the balance sheet is in good shape overall.
Just how bad is it in the South African businesses? Well, the mining explosives business in Modderfontein (near where I went to nursery school, actually) had to declare force majeure for part of the period due to lead azide supply issues. They also had poor power supply, with unplanned outages.
And in AECI Chemicals, they struggled with low demand in South Africa for sulphuric acid, as well as a credit loss based on a major customer entering business rescue.
The share price has been exceptionally volatile over the past 12 months, but is on a charge this year with a year with a 21% year-to-date return. The uptick in margins supports the recent positive momentum, with the company no doubt hoping to improve conversion of turnaround efforts into headline earnings growth.
Closures and disposals at African Rainbow Minerals (JSE: ARI)
The losses at Cato Ridge are unsustainable
African Rainbow Minerals holds a 50% stake in Assmang, with the other 50% held by Assore (the jokes do unfortunately write themselves here). There have been some major steps taken with the assets of Assmang.
The first one is the closure of Cato Ridge Development Company, which means the retrenchment of all its employees. This comes after a period of trying to find ways to overcome the financial losses. The land is intended to be redeveloped into commercial and logistics property, with Assmang selling the properties to a wholly-owned subsidiary of Assore for R453 million.
The second step is the sale by Assmang to Assore of all the shares in Sakura Ferroalloys. When this deal closes, Assmang is expected to distribute R900 million in cash to African Rainbow Minerals.
Overall, this feels like a good example of a corporate that is cleaning house, with a cash unlock that certainly won’t hurt the African Rainbow Minerals balance sheet. For context, the group’s current market cap is R38 billion.
No news at ArcelorMittal – but is that good news or bad news? (JSE: ACL)
The share price has been choppy since the May cautionary
ArcelorMittal is trading under cautionary and caution is certainly what everyone should be exercising, as the company remains a financial basket case. Due to the social impact of the group’s longs business, there are a number of stakeholders working to try and defer or even avoid the wind-down entirely.
The update in May was that the IDC is making a loan available to defer the wind-down until at least the end of August. This also triggered a due diligence period during which the parties would consider strategic alternatives.
We are now at the end of June, which means that the wind-down date isn’t that far away anymore. All we have to work with is a bland cautionary update that simply references the May cautionary and gives no further updates.
Is that good news or bad news? It’s not clear, with the market sharing that sentiment in the form of sideways share price action since May. Literally anything is possible here.
It looks like there are enough acceptances for the Barloworld deal to go ahead (JSE: BAW)
The period for acceptance of the offer has been extended
As you may recall, the scheme of announcement for the take-private of Barloworld failed this year. This triggered a standby offer, which came with a clearly impractical minimum acceptances condition that was above the level required to get the scheme approved in the first place. As I wrote many times, there’s no way that the offerors ever intended to implement that condition. I also speculated that they were probably just looking for control of the asset i.e. a 50.1% holding or higher.
Time has proven me correct here, with the parties noting that they are willing to go ahead at the current level of acceptances that would give them a 57.7% stake in Barloworld. They specifically note in this announcement that 51% is the goal.
Due to technical elements of the deal and exactly how the remaining conditions are expected to be fulfilled, the offeror consortium has decided to extend the acceptance date deadline to the date on which the other offer conditions are either fulfilled or waived. There are still some important regulatory hoops to jump through and they want to make sure that the offer doesn’t lapse in the meantime. As part of this extension, the consortium has agreed to pay a break free of R20 million to Barloworld if the conditions are not fulfilled.
Barloworld is trading at R113 per share and the offer price is R120 per share, so there’s now a value of money consideration that will drive any arbitrage trading. There’s effectively a return of 6% between the current price and the offer price, but it could still take many months for this deal to be finalised.
Exxaro’s bearish tone matches their share price (JSE: EXX)
The pre-close update tells a tough story
Exxaro has released a pre-close update for the six months to June 2025. This period has of course been characterised by the trade war and the impact that this has had on the global economy. This has led to the weak sentiment in the coal market in 2024 continuing into 2025. The Richards Bay Coal Terminal export price for the first half of 2025 is expected to average $91 per tonne, a nasty 27.3% drop from $110 per tonne in the second half of 2024. The iron ore fines price is basically flat vs. the second half of 2024.
The pricing pressure isn’t being offset by volumes. Quite the opposite, actually, with production and sales volumes expected to be down 6% and 7% respectively. It’s not just export demand that is a problem, as Eskom’s offtake in the Waterberg region declined. And with weak export prices, more supply was available locally, putting the coal producers on the wrong side of the supply-demand dynamic.
There isn’t much good news here, but at least capex for the first half of the year is expected to be 19% lower than the second half of 2024. The balance sheet remains strong, with net cash of R19.5 billion (excluding net debt of R5.8 billion in the energy business – where even the winds aren’t blowing as well as they normally do).
In an effort to diversify, Exxaro is buying manganese assets in a deal that was announced back in May. The purchase price is between R9.0 billion and R14.64 billion, so now you know where that excess cash on the balance sheet is going.
The announcement isn’t explicit on earnings guidance, but it’s pretty clear that it’s going to be ugly. The share price is down 18% over 12 months and only 7% year-to-date, surprisingly.
Goldrush released its first-ever consolidated accounts (JSE: GRSP)
Life as an investment entity is behind them
Goldrush recently made the decision to transition from investment entity accounting (i.e. assets and liabilities at fair value) to “normal” accounting in which underlying operations are consolidated and you get detailed disclosure of the various line items. The bad news is that the latest numbers aren’t comparable to the prior year. The good news is that this gives investors much more visibility in years to come.
Goldrush has been in the news lately in relation to the Sizekhaya consortium, which was awarded the national lottery licence. This will lead to an initial build-out period for infrastructure, followed by several years of hopefully successful operations. There’s a fair bit of political heat on this contract at the moment, so that’s something to watch.
In Goldrush’s core operations, additional disclosure to assist with comparability shows that operating profit was roughly 0.7% higher year-on-year. As you would expect, areas like sports betting (revenue up 75%) are growing much faster than in-person offerings in the alternative gaming space (like bingo, with revenue down 1.7%).
With a stake in the ground now in terms of consolidated group accounts, investors will be able to keep an eye on how group operating profit margin moves over time. In 2025, that margin was 12.5%. Another key metric is of course HEPS, which was 141.91 cents in this period. The share price is currently R8.00.
Strong growth at Invicta (JSE: IVT)
But what will it take to get the share price out of the recent range?
Invicta’s share price enjoyed a sharp recovery as COVID abated, but things since then have been very sideways:
This share price looks like it wants to break higher, but what will that take? The latest numbers certainly help, with growth in revenue for the year ended March 2025 of 6% and HEPS of 14%.
Invicta has a number of industrial businesses around the world, with the common thread being a focus on supplying machinery parts and engineering consumables to various industries. As the underlying exposures tend to be cyclical, the diversified model works well here for smoothing profits. In this period though, there was impressive consistency across the divisions in terms of putting through decent numbers.
In terms of corporate activity, the group redeemed the outstanding preference shares and repurchased ordinary shares as well. They acquired Nationwide Bearing Company for R294 million in April 2024. At the same time, they moved their interest in KMP Holdings into Kian Ann Engineering, which they now equity account due to their 48.81% stake. They also disposed of the Kian Ann warehouse and used the proceeds to reduce debt.
The DNA of Invicta is firmly in dealmaking. The current global supply chain issues create volatility, but also opportunity. They are on the hunt for new acquisitions and products, so watch this space.
Lesaka sells Mobikwik for R290 million (JSE: LSK)
It’s been a busy period for them!
At the end of last week, Lesaka Technologies was the talk of the town with the Bank Zero acquisition. Now there’s a further update, with the company selling its entire stake in One Mobikwik Systems on the Indian Stock Exchange for R290 million.
This gives them significantly more cash than they need for the Bank Zero acquisition, with roughly R1 billion of the purchase price to be settled through the issuance of shares and around R100 million to be paid in cash. They are making significant portfolio changes at Lesaka and investors will be watching closely.
Even with the Bank Zero deal, the share price is down 18% year-to-date. I’ve picked up some concern in the market around the valuation of Bank Zero, so I look forward to seeing more details on the numbers and the price/book multiple they’ve paid there.
Lighthouse bucks the footfall trend (JSE: LTE)
The eCommerce risks are barely visible in this portfolio
As a Ghost Mail reader, you already know two things: (1) Lighthouse Properties loves buying properties in Iberia in particular, and (2) Des de Beer loves buying shares in Lighthouse Properties! I can’t see either situation changing anytime soon.
A pre-close update for Lighthouse notes two notable acquisitions in Spain this year, one of which was only announced on the day of the pre-close. The first one was the acquisition of Alcala Magna for €96.3 million on a yield of 7.6%. The latest deal is for Espacio Mediterraneo (which sounds like a delicious starter somewhere), acquired for €135.4 million on a yield of 7.0%. The latter must be a particularly high quality asset for that price to be justifiable.
Looking at the overall direct property portfolio, sales grew by 8.6% for the five months to May 2025. Importantly, footfall was up 4.6% – a much better result than we’ve seen from REITs recently (albeit in other regions). This helps explain why Lighthouse is excited about Spain and Portugal, with the portfolio in France also showing positive moves.
As an interesting tidbit, an increase in vacancies from 2.0% at December 2024 to 2.8% at May 2025 was mainly due to the closure of a trampoline park, with the national operator facing financial challenges. I must say, given the birth rate trend in Europe, I would need a lot of convincing to open a business focused on kids entertainment with high operating costs. As a sign of the times, the park is being replaced by a national fashion retailer.
Moving on to the balance sheet, holders of 23% of shares elected the scrip dividend rather than cash, leading to the issuance of around R127 million worth of shares in April at R7.52 per share. In early June, Lighthouse raised R400 million in an accelerated bookbuild at R8.20 per share, a discount of 2% to the net asset value per share. And to further support the acquisitions, they’ve raised €184.6 million (around R3.85 billion) in debt since December 2024. This is why the loan-to-value ratio has jumped from 25.0% to 35.5% since December. That’s still a healthy balance sheet, but there isn’t a huge amount of headroom for further gearing.
Full-year guidance distribution of 2.70 EUR cents per share has been reaffirmed.
MAS released a voluntary trading update ahead of the extraordinary general meeting (JSE: MAS)
Shareholders will need to think about the message they want to send with their vote
If you’ve followed the MAS story, you’ll know that PK Investments has called for a shareholders meeting to get the view of shareholders on whether MAS should essentially be put through an orderly value unlock process, which means selling off properties and returning capital to shareholders. You’ll also know that Hyprop is waiting in the wings to make a potential offer, all while sitting on equity capital that the market threw at them on the off-chance of an offer (RIP to distribution per share growth as a result).
Much of the issue, as explained by the MAS board in this announcement, comes down to a “difference of opinion” regarding the way in which the capital in the joint venture with PK Investments can be distributed. Bluntly, MAS wants that cash and PK doesn’t want to pay it out unless there’s certainty over what the future strategy will be. MAS is looking to publish a legal summary of the agreement and the position, but they need consent from Prime Kapital to publish it.
A further important confirmation in the announcement is that newly-appointed MAS CFO, Bogdan Oslobeanu, has no relationship with Prime Kapital. They are also looking to appoint additional non-executive directors to beef up corporate governance.
Now for the trading update, which deals with the five months to May 2025. Footfall was slightly higher and tenant sales increased by 7%, so that’s good news.
The problem is that MAS still has a hole in its balance sheet based on forecasts out to 2026, as they continue to run a race against time for debt maturities. They need another €43 million out of €262 million to cover capex and debt payments. To be fair, it might be more than that, as they are still in negotiations for €45 million in secured debt. The current cash balance is only €174 million.
Earnings guidance for the year to June 2025 is 9.37 to 9.79 EUR cents per share. I think the focus at this moment is more on the balance sheet than the earnings to be honest, with many moving parts here. The MAS share price is up 50% in the past year, having been on an epic rollercoaster ride with a 52-week high of R24.65 and a 52-week low of R15.76.
Resilient is running ahead of expectations (JSE: RES)
They expect strong growth this year
Resilient REIT released a pre-close update for the six months to June. Notably, Resilient owns 27.6% of Lighthouse, so you should read this in conjunction with the Lighthouse update further up. Another point to note is that Resilient hasn’t been shy to sell Lighthouse shares to fund its own development pipeline, with a disposal of R332.2 million in such shares in this period.
In South Africa, sales in the retail portfolio increased by 6.9% and leases achieved positive reversions of 2.2%. They’ve been pushing hard on solar investments, with recent installations taking them to a level where 39.2% of total energy requirements are being supplied by solar.
In the direct offshore portfolio, the Spanish asset saw sales increased by 8.7% for the period. France also put in a positive performance, up 4.6% in terms of retail sales. There’s a notable vacancy rate of 6.4% in the French portfolio though.
Overall, the group is performing ahead of expectations and Resilient has put out updated guidance of 8% growth in the distribution for FY25. This also assumes that Lighthouse achieves its guidance.
Spear’s Western Cape focus continues to pay off (JSE: SEA)
But of course, it’s hard to find a bargain in the province
The good news is that the Western Cape continues to do well, with Spear REIT correctly referring to it having the strongest real estate fundamentals in the country. The bad news is that the market knows this, so the chances of finding mispriced properties in the Western Cape probably aren’t good. This makes it harder for Spear REIT to keep growing its portfolio, as they must maintain discipline in acquisitions to avoid overpaying for assets.
In an update for the three months to May 2025, which is the first quarter of the 2026 financial year, Spear’s distributable income per share increased by 5.74%. Their loan-to-value ratio improved slightly to 26.18%, so the balance sheet is in good health – and it will be even better once you take into account the capital raise in June, with a pro-forma range of 16% to 18%. The tangible net asset value per share is R12.43 and the current share price is R10.30, so even Spear is trading at a discount to book – as is typical in the local property sector.
One of the strategies they are pursuing for growth is to push for higher rentals on renewals, a strategy that can lead to what they call “vacancy creep” on a short-term basis i.e. tenants electing not to renew based on pricing. It’s all about supply and demand of course, something that Spear has to manage closely. Even with higher vacancies than expected, they are on track with distributable income per share guidance of growth of 4% to 6% for FY26. In fact, they are above the midpoint of this range, currently running at 5.75%.
The key will be to bring vacancies in line with where they need to be, as I don’t think they can afford to be too greedy on renewal rates in this broader macroeconomic environment. In-force escalation rates in the portfolio are already running at over 7%.
Sephaku’s HEPS moved higher in FY25 (JSE: SEP)
The South African construction sector remained weak in 2024 though
Sephaku’s business consists of its 100% stake in Métier and its 36% stake in SepCem. This means that group revenue is only related to the Métier stake, as the SepCem numbers are accounted for as an associate. To add further complexity, SepCem has a December year-end, so Sephaku’s results for the year ended March 2025 actually reflect SepCem’s numbers for the year ended December 2024!
With that out the way, we can just consider the underlying performance. Métier saw volumes drop by 8% year-on-year after two years of strong growth, with rainfall in the last three months of the year as a factor. Despite this, revenue increased by 2% and every region has seen improved margins, with EBIT up 9%. Métier took on more debt this year for its capex programme and also used cash to execute repurchases of Sephaku Holdings shares.
In SepCem, the weak South African construction sector continues to weigh on performance. Volumes were down 4% and revenue fell by 1%. Due to the operating leverage inherent in the model, EBITDA fell by 11%. Despite this, net profit after tax was slightly higher.
With all said and done, Sephaku Holdings’ normalised HEPS was up 22.6% to 31.72 cents. That seems to be a flattering view of what’s really going on in this market.
Nibbles:
Director dealings:
Here’s some more selling by directors of Santova (JSE: SNV), this time by a director of a major subsidiary to the value of R2.1 million.
A prescribed officer of Astral Foods (JSE: ARL) sold shares worth R356k.
The company secretary of Pick n Pay (JSE: PIK) sold shares worth R163k.
The ongoing saga of who will acquire Assura (JSE: AHR) seems to have settled down, with Primary Health Properties (JSE: PHP) close to having this one in the bag. Will there be a sting in the tail from KKR / Stonepeak? In the meantime, the latest update is that the Assura board has released supplementary documentation including board letters and an expected timetable for the deal. If the private equity players are planning to throw more cash at this thing, now is their chance.
Copper 360 (JSE: CPR) released results for the year ended February 2025. They had some major production challenges, so they need significant capital expenditure to achieve profitability in the cathode business. Although revenue jumped by 349% year-on-year, it was below forecast levels due to various operational delays. Here’s the real problem: the loss for the year jumped from R64.8 million to R223.1 million due to the huge jump in costs to support operations that didn’t perform as expected. They refer to themselves as an “undercapitalised exploration company” and this only leads to one thing: equity capital raises. Time will tell exactly what that will look like.
Having jumped through a regulatory hoop, Pan African Resources (JSE: PAN) is now able to repurchase shares on the JSE in addition to the London Stock Exchange. They believe that their shares are undervalued. As a happy shareholder, I won’t fight that logic.
Here’s something you won’t see every day: the AGM of Equites Property Fund (JSE: EQU) includes a resolution regarding a special repurchase of shares from directors that represent the taxable portion of share awards. This avoids the directors having to sell the shares on the market. I don’t really understand the point here, as there is plenty of liquidity at Equites for both repurchases and on-market sales by directors to take place.
Furniture and insurance small cap Nictus (JSE: NCS) saw its revenue drop by 23% for the year ended March 2025, yet HEPS increased by 84%. To add to these wild swings, the dividend for the year doubled to 12 cents per share! Despite this, someone hit the sell button, with a 6.4% drop by close of play on significantly higher volumes than an average day (but still very little liquidity overall). Here’s another crazy stat for you: HEPS has increased by over 4x since 2022, with the share price up 220% over three years. Small caps are many things, but boring isn’t one of them.
Visual International Holdings (JSE: VIS), a rare example of a stock trading at literally R0.01 per share (the mathematical minimum), has seen HEPS drop by 88% to 3.33 cents for the year ended February 2025. In case you are following this stock closely for some reason, there’s a separate announcement dealing with an adjustments made for a tax matter that goes back to the 2013 / 2014 restructure.
Cilo Cybin Holdings (JSE: CCC) is a special purpose acquisition company (SPAC) that is still busy finalising its acquisition of a viable asset, namely Cilo Cybin Pharmaceutical. The proposed acquisition price is R845 million, settled through the issuance of shares. While all this is going on, the money raised from the listing that is held in escrow has earned R4.8 million in investment revenue for the year ended March 2025, while the company burnt through R5.1 million in admin expenses. The remaining cash balance as at the end of March was R58.3 million.
Recently listed Shuka Minerals (JSE: SKA) released financials for the year ended December 2024. This is very much a junior mining company with all the joys that brings, hence why there’s close to zero revenue and an operating loss of £1.8 million.
Trencor (JSE: TRE) received unanimous approval at the shareholder meeting for the winding up of the company. There is still a legal condition for the winding up that is sitting with the Master of the High Court.
Henry Laas has retired from the board of Murray & Roberts (JSE: MUR). Some careers end with a bang, while others end with a whimper.
Efora Energy (JSE: EEL) is late with its results for the year ended February 2025. After initially indicating that they would be released by June, it’s now been kicked out to the end of July. The annual report is expected to be done by the end of August.
In case you’re active in Telemasters (JSE: TLM) shares, be aware that the share repurchase programme will continue during the closed period from 1 July 2025 to 30 September 2025. The purchase price won’t be more than 10% higher than the 5-day VWAP.
Conduit Capital (JSE: CND) is suspended from trading and must thus release quarterly updates. They are still pursuing the arbitration award that they were given against Trustco Properties. You may also recall that after the regulator blocked the sale of TMM for R55 million, the buyer eventually walked away after a period of trying to get the deal across the line. Conduit is still miles away from having the suspension lifted, with the auditors currently working on results for the six months to December 2022!
Sail Mining Group (JSE: SGP) has been suspended from trading since July 2022. Since then, they’ve had three subsidiaries in business rescue! One of them subsequently came out of business rescue in December 2024, but there are still many complications here and the company will remain suspended until they’ve caught up on the financials.
For the sake of completeness, another company in the JSE dustbin is PSV Holdings (JSE: PSV), where proposals are being made to take the business out of provisional liquidation. Perhaps there will finally be a recapitalisation of the company – and maybe even a website!
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