In the biggest director’s deal of the past month, Dave van Niekerk, CEO of Blue Financial Services (JSE:BFS), has bought shares in Blue worth R207m.
Before the Securities Regulation Panel would authorise Blue to make a firm bid for its rival in microfinance, Credit U, or even to go out on road shows looking for institutional support, it wanted assurance that the purchasing parties had the resources to conclude the deal.
Blue, which is a microlender in 12 African countries, offered 44,5 Blue shares for every 100 Credit U. It amounted to a total offer of R278m, half in shares, half in cash. Blue would issue 51,5m share at 540c.
Van Niekerk, who was personally underwriting Blue’s bid was obliged to prove that he had sufficient cash to satisfy the cash consideration of R139,07m.
Van Niekerk was therefore required to buy a R207m single-stock future to underpin the cash half of the transaction. The future expires on September 14. Meantime, Van Niekerk’s own shares in Blue are being held as security.
With shareholders such as AIG, the IFC and Stanlib on board already, he is confident that institutions will step forward to help fund the deal.
The acquisition will virtually double the size of Blue in SA. Credit U has a book of some R280m – virtually equal to the purchase consideration.
It will double Blue’s number of branches in SA and remove a competitor. Because Blue’s stock enjoys a PE multiple of more than 50 and the pricing is so favourable, the transaction would have enhanced diluted headline earnings per share in the year to February by some 36%.
Blue’s most recent results for the year to February underscore just how profitable microlending is. Its loan book doubled to R480m. That brought in interest receipts of R182,7m – which suggests an average loan rate of 38%. Its interest cost rose by 162% to R66m – still only a third of interest earnings.
Blue is a pan-African version of Abil (JSE:ABL). Indeed, Van Niekerk worked at Abil. He confirms that the goal is to get bigger and let higher volumes continue to boost profits even if interest margins reduce over time.
Blue’s results are consolidated at official exchange rates, which might be seen as risky given the Zimbabwe experience and the potential for turmoil in certain areas of operation.
Van Niekerk is not fazed, however. He says Blue can move money quickly and easily between different theatres. Van Niekerk points out that the business thrived before and after the deadly riots earlier this year in Kenya and that Blue’s spread over numerous countries reduces its risk.
Van Niekerk’s right hand man Riaan Swart stepped down earlier this year to focus on his family and game farming. Swart retains the 19% of the equity he had before the CreditU acquisition. Van Niekerk held 18,7% before the deal, AIG 14,8% and Stanlib 11,2%. The latest transaction is bound to affect the relative shareholdings.
Swart’s departure left Van Niekerk as chairman and CEO, which puts the company foul of King 2. The company recently underwent a change of CFO as well.
Blue’s share price has doubled to 665c in the past year. That is well clear of the 540c price at which the new shares are being offered. The PE of 55 shows that subprime lenders in SA are still highly regarded.
Company |
Share |
Director |
Type |
Date |
Total |
Blue Financial Services Ltd |
BFS |
Dave Van Niekerk |
Buy |
12-Aug-08 |
207,080,000 |
Eureka Industrial Ltd |
EUR |
Ronald S Price |
Buy |
23-Jul-08 |
107,843,620 |
City Lodge Hotels Ltd |
CLH |
Hans R Enderle |
Sell |
28-Jul-08 |
60,353,306 |
Investec Ltd |
INL |
Bernard Kantor |
Sell |
22-Jul-08 |
39,848,000 |
Allied Electronics Corporation Ltd |
ATN |
William P Venter |
Sell |
12-Aug-08 |
33,928,800 |
Invicta Holdings Ltd |
IVT |
A Goldstone |
Buy |
15-Aug-08 |
30,550,000 |
Investec Ltd |
INL |
Bernard Kantor |
Buy |
22-Jul-08 |
26,015,000 |
Fairvest Property Holdings Ltd |
FVT |
J F du Toit |
Buy |
25-Jul-08 |
21,603,220 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
28-Jul-08 |
20,363,138 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
25-Jul-08 |
15,202,571 |
Anglo Platinum Ltd |
AMS |
M Valli Moosa |
Buy |
31-Jul-08 |
11,166,980 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
31-Jul-08 |
10,980,000 |
Group Five Ltd |
GRF |
Cristina Teixeira |
Buy |
21-Aug-08 |
8,568,000 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
06-Aug-08 |
6,923,095 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
24-Jul-08 |
6,409,036 |
Ansys |
ANS |
Alan Holloway |
Sell |
29-Jul-08 |
4,800,000 |
Alex Forbes P |
AFP |
Director of a subsidiary |
Buy |
15-Aug-08 |
3,369,100 |
African Dawn Capital Ltd |
ADW |
M N Ramashela |
Buy |
18-Aug-08 |
3,078,000 |
African Dawn Capital Ltd |
ADW |
M N Ramashela |
Sell |
18-Aug-08 |
3,078,000 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
29-Jul-08 |
2,878,866 |
Tiger Brands Ltd |
TBS |
Director of a subsidiary |
Options exercised |
30-Jul-08 |
2,830,779 |
Foschini Ltd |
FOS |
M Lewis |
Buy |
07-Aug-08 |
2,799,677 |
Combined Motor Holdings Ltd |
CMH |
C L Odendaal |
Sell |
08-Aug-08 |
2,621,586 |
AngloGold Ashanti Ltd |
ANG |
Mark Cutifani |
Buy |
01-Aug-08 |
2,412,500 |
Astrapak Ltd |
APK |
G Petzer |
Sell |
15-Aug-08 |
2,196,000 |
Beige P |
BEGP |
Aubrie du Preez |
Buy |
08-Aug-08 |
1,935,614 |
AngloGold Ashanti Ltd |
ANG |
Srinivasan Venkatakrishnan |
Sell |
01-Aug-08 |
1,837,119 |
TWP |
TWP |
Nigel John Townshend |
Buy |
25-Jul-08 |
1,807,000 |
TWP |
TWP |
Steven Dewsbery |
Buy |
25-Jul-08 |
1,798,000 |
Tiger Brands Ltd |
TBS |
Director of a subsidiary |
Options exercised |
23-Jul-08 |
1,784,000 |
Absa Group Ltd |
ASA |
Steve F Booysen |
Options exercised |
20-Aug-08 |
1,575,450 |
Stefanutti |
SFB |
Director of a subsidiary |
Sell |
18-Aug-08 |
1,211,000 |
Beige P |
BEGP |
Mathys M du Preez |
Buy |
08-Aug-08 |
1,106,031 |
Kumba Iron Ore Ltd |
KIO |
Vincent Patrick Uren |
Buy |
24-Jul-08 |
1,018,258 |
Afrimat Ltd |
AFT |
Francois du Toit |
Buy |
21-Aug-08 |
862,500 |
Tiger Brands Ltd |
TBS |
Director of a subsidiary |
Sell |
24-Jul-08 |
853,078 |
Fairvest Property Holdings Ltd |
FVT |
J F du Toit |
Buy |
24-Jul-08 |
839,150 |
The Spar Group Ltd |
SPP |
Roelof Venter |
Sell |
05-Aug-08 |
818,850 |
Blue Financial Services Ltd |
BFS |
Mpumela J Sondiyazi |
Sell |
11-Aug-08 |
808,750 |
Stefanutti |
SFB |
Director of a subsidiary |
Sell |
14-Aug-08 |
700,000 |
Miranda Mineral Holdings Ltd |
MMH |
Alan R Thompson |
Sell |
12-Aug-08 |
699,072 |
Allied Electronics Corporation Ltd |
ATN |
Director of a subsidiary |
Buy |
24-Jul-08 |
690,000 |
Invicta Holdings Ltd |
IVT |
A Goldstone |
Buy |
24-Jul-08 |
690,000 |
Alex Forbes P |
AFP |
Director of a subsidiary |
Buy |
15-Aug-08 |
584,705 |
Hosken Consolidated Investments Ltd |
HCI |
Yunis Shaik |
Buy |
05-Aug-08 |
580,000 |
Hosken Consolidated Investments Ltd |
HCI |
Elias Velaphi Mphande |
Sell |
05-Aug-08 |
580,000 |
Naspers Ltd |
NPN |
Director of a subsidiary |
Sell |
25-Jul-08 |
573,448 |
Merafe Resources Ltd |
MRF |
D Steve Phiri |
Buy |
06-Aug-08 |
526,080 |
Hosken Consolidated Investments Ltd |
HCI |
Yunis Shaik |
Buy |
15-Aug-08 |
450,000 |
Hosken Consolidated Investments Ltd |
HCI |
Elias Velaphi Mphande |
Sell |
15-Aug-08 |
450,000 |
Beige P |
BEGP |
Aubrie du Preez |
Buy |
06-Aug-08 |
415,729 |
Ellies |
ELI |
Director of a subsidiary |
Sell |
14-Aug-08 |
405,000 |
Illovo Sugar Ltd |
ILV |
Director of a subsidiary |
Sell |
18-Aug-08 |
403,218 |
City Lodge Hotels Ltd |
CLH |
Hans R Enderle |
Sell |
28-Jul-08 |
398,554 |
Kumba Iron Ore Ltd |
KIO |
Director of a subsidiary |
Sell |
20-Aug-08 |
343,650 |
Remgro Ltd |
REM |
Josua Malherbe |
Buy |
08-Aug-08 |
340,000 |
Miranda Mineral Holdings Ltd |
MMH |
Michael Cook |
Sell |
12-Aug-08 |
336,791 |
City Lodge Hotels Ltd |
CLH |
Clifford Ross |
Buy |
28-Jul-08 |
312,835 |
African Brick |
ABK |
Benoni van Graan |
Buy |
28-Jul-08 |
267,500 |
African Brick |
ABK |
Benoni van Graan |
Buy |
30-Jul-08 |
264,375 |
Resilient Property Income Fund Ltd |
RES |
Des De Beer |
Buy |
19-Aug-08 |
262,500 |
Omnia Holdings Ltd |
OMN |
N K H Fitz-Gibbon |
Buy |
31-Jul-08 |
257,496 |
Beige P |
BEGP |
Mathys M du Preez |
Buy |
06-Aug-08 |
237,553 |
City Lodge Hotels Ltd |
CLH |
Clifford Ross |
Buy |
14-Aug-08 |
234,750 |
Miranda Mineral Holdings Ltd |
MMH |
Ronald John Nel |
Options exercised |
12-Aug-08 |
233,241 |
City Lodge Hotels Ltd |
CLH |
Frank W J Kilbourn |
Sell |
28-Jul-08 |
228,180 |
African Dawn Capital Ltd |
ADW |
C d W Vivier |
Buy |
22-Jul-08 |
220,000 |
African Brick |
ABK |
Benoni van Graan |
Buy |
01-Aug-08 |
200,640 |
PSG Group Ltd |
PSG |
Willem Theron |
Buy |
11-Aug-08 |
180,500 |
Kumba Iron Ore Ltd |
KIO |
Vincent Patrick Uren |
Buy |
24-Jul-08 |
179,693 |
Allied Electronics Corporation Ltd |
ATNP |
Director of a subsidiary |
Sell |
01-Aug-08 |
179,690 |
Ellies |
ELI |
Raymond Hillard Berkman |
Buy |
25-Jul-08 |
177,000 |
Pretoria Portland Cement Company Ltd |
PPC |
O Fenn |
Options exercised |
22-Jul-08 |
175,722 |
City Lodge Hotels Ltd |
CLH |
A C Widegger |
Sell |
28-Jul-08 |
171,135 |
Investec Ltd |
INL |
Ian R Kantor |
Sell |
11-Aug-08 |
169,249 |
Peregrine Holdings Ltd |
PGR |
Director of a subsidiary |
Buy |
29-Jul-08 |
166,650 |
Telematrix |
MIX |
Stefan Joselowitz |
Sell |
22-Jul-08 |
159,600 |
Telematrix |
MIX |
Stefan Joselowitz |
Buy |
22-Jul-08 |
159,600 |
Beige Holdings Ltd |
BEG |
Yaseen Bhayat |
Buy |
12-Aug-08 |
147,000 |
Mr Price Group Ltd |
MPC |
Shane van Niekerk |
Sell |
15-Aug-08 |
138,960 |
Beige P |
BEGP |
Aubrie du Preez |
Buy |
08-Aug-08 |
133,416 |
Beige P |
BEGP |
Mathys M du Preez |
Buy |
08-Aug-08 |
133,416 |
Spanjaard Ltd |
SPA |
B L Montgomery |
Buy |
14-Aug-08 |
125,000 |
Illovo Sugar Ltd |
ILV |
Director of a subsidiary |
Options exercised |
18-Aug-08 |
124,146 |
Brikor |
BIK |
G van Niekerk Parkin |
Buy |
23-Jul-08 |
111,940 |
The Spar Group Ltd |
SPP |
Roelof Venter |
Options exercised |
05-Aug-08 |
108,438 |
Ideco |
IDE |
Vhonani Mufamadi |
Buy |
23-Jul-08 |
101,645 |
Cadiz Holdings Ltd |
CDZ |
Ram Barkai |
Buy |
21-Aug-08 |
99,956 |
Investec plc |
INP |
Ian R Kantor |
Sell |
11-Aug-08 |
98,619 |
Omnia Holdings Ltd |
OMN |
N K H Fitz-Gibbon |
Buy |
31-Jul-08 |
96,689 |
Merafe Resources Ltd |
MRF |
Con J Fauconnier |
Buy |
08-Aug-08 |
96,000 |
The Spar Group Ltd |
SPP |
R W Coe |
Options exercised |
05-Aug-08 |
90,706 |
Wescoal Holdings Ltd |
WSL |
Designated advisor |
Buy |
01-Aug-08 |
90,000 |
Wescoal Holdings Ltd |
WSL |
Designated advisor |
Buy |
31-Jul-08 |
90,000 |
Set Point Technology Holdings Ltd |
STO |
Mark J Smith |
Buy |
22-Jul-08 |
90,000 |
Wescoal Holdings Ltd |
WSL |
Andre Russell Boje |
Buy |
04-Aug-08 |
80,000 |
Convergenet |
CVN |
Gordon Stanley Edwards |
Buy |
22-Jul-08 |
76,757 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
13-Aug-08 |
70,970 |
Miranda Mineral Holdings Ltd |
MMH |
Alan R Thompson |
Buy |
15-Aug-08 |
66,000 |
Miranda Mineral Holdings Ltd |
MMH |
Ronald John Nel |
Buy |
15-Aug-08 |
65,500 |
Ellies |
ELI |
Raymond Hillard Berkman |
Buy |
14-Aug-08 |
62,790 |
Beige Holdings Ltd |
BEG |
Ian Black |
Buy |
12-Aug-08 |
60,000 |
Brikor |
BIK |
Garnett Parkin (Junior) |
Buy |
24-Jul-08 |
54,084 |
All Joy Foods Ltd |
ALJ |
Maslamony T Pather |
Options exercised |
08-Aug-08 |
50,000 |
Set Point Technology Holdings Ltd |
STO |
Christopher S Seabrooke |
Buy |
28-Jul-08 |
48,600 |
Aquarius Platinum Ltd |
AQP |
Nicholas T Sibley |
Buy |
07-Aug-08 |
47,400 |
BSI |
BSS |
N G Payne |
Buy |
21-Aug-08 |
44,129 |
Brikor |
BIK |
Designated advisor |
Buy |
23-Jul-08 |
38,563 |
Ideco |
IDE |
Malose F Kekana |
Buy |
23-Jul-08 |
34,980 |
Kumba Iron Ore Ltd |
KIO |
Director of a subsidiary |
Options exercised |
20-Aug-08 |
33,060 |
Set Point Technology Holdings Ltd |
STO |
Mark J Smith |
Buy |
22-Jul-08 |
31,356 |
Beige P |
BEGP |
Aubrie du Preez |
Buy |
06-Aug-08 |
28,655 |
Biege P |
BEGP |
Mathys M du Preez |
Buy |
06-Aug-08 |
28,655 |
PSG Group Ltd |
PSG |
Johannes F Mouton |
Buy |
11-Aug-08 |
28,500 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
23-Jul-08 |
28,500 |
Kumba Iron Ore Ltd |
KIO |
Vincent Patrick Uren |
Buy |
25-Jul-08 |
27,930 |
Metmar Ltd |
MML |
Company secretary |
Buy |
01-Aug-08 |
27,150 |
Allied Electronics Corporation Ltd |
ATNP |
Director of a subsidiary |
Options exercised |
01-Aug-08 |
26,954 |
Mondi Plc |
MNP |
Peter Oswald |
Buy |
30-Jul-08 |
25,300 |
Spanjaard Ltd |
SPA |
R J W Spanjaard |
Buy |
21-Aug-08 |
24,840 |
African Eagle |
AEA |
Euan Arthur Worthington |
Buy |
23-Jul-08 |
22,500 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
06-Aug-08 |
21,407 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
11-Aug-08 |
17,400 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
31-Jul-08 |
17,150 |
Nictus Ltd |
NCS |
N C Tromp |
Buy |
14-Aug-08 |
13,063 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
29-Jul-08 |
13,000 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
11-Aug-08 |
11,700 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
07-Aug-08 |
11,500 |
Beige P |
BEGP |
Lionel I Karp |
Buy |
08-Aug-08 |
11,204 |
Conduit Capital Ltd |
CND |
Stanley D Shane |
Buy |
29-Jul-08 |
11,000 |
Amalgamated Electronic Corporation Ltd |
AER |
Derrick Alexander |
Buy |
11-Aug-08 |
10,000 |
Alex Forbes P |
AFP |
Director of a subsidiary |
Buy |
15-Aug-08 |
9,592 |
Beige P |
BEGP |
Mark M Di Nicola |
Buy |
08-Aug-08 |
8,571 |
All Joy Foods Ltd |
ALJ |
Stanley Fanaroff |
Options exercised |
08-Aug-08 |
7,150 |
Amalgamated Electronic Corporation Ltd |
AER |
Derrick Alexander |
Buy |
05-Aug-08 |
6,608 |
Lonmin plc |
LON |
Brad Mills |
Buy |
19-Aug-08 |
6,588 |
Combined Motor Holdings Ltd |
CMH |
C L Odendaal |
Sell |
08-Aug-08 |
6,494 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
18-Aug-08 |
6,240 |
African Eagle |
AEA |
Geoffrey W Cooper |
Buy |
22-Jul-08 |
6,000 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
07-Aug-08 |
5,800 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
19-Aug-08 |
5,760 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
21-Aug-08 |
5,625 |
City Lodge Hotels Ltd |
CLH |
I Nigel Matthews |
Sell |
28-Jul-08 |
5,552 |
Stratcorp Ltd |
STA |
Company secretary |
Buy |
13-Aug-08 |
4,950 |
Set Point Technology Holdings Ltd |
STO |
Christopher S Seabrooke |
Buy |
14-Aug-08 |
4,446 |
Beige P |
BEGP |
Lionel I Karp |
Buy |
08-Aug-08 |
3,734 |
African Eagle |
AEA |
Bevan John Metcalf |
Buy |
24-Jul-08 |
3,000 |
Beige P |
BEGP |
Lionel I Karp |
Buy |
06-Aug-08 |
2,406 |
Allied Electronics Corporation Ltd |
ATNP |
Director of a subsidiary |
Sell |
31-Jul-08 |
2,310 |
Beige P |
BEGP |
Mark M Di Nicola |
Buy |
06-Aug-08 |
1,841 |
ConvergeNet |
CVN |
Hanno Van Dyk |
Buy |
06-Aug-08 |
1,184 |
Beige P |
BEGP |
Lionel I Karp |
Buy |
06-Aug-08 |
803 |
City Lodge Hotels Ltd |
CLH |
Director of a subsidiary |
Sell |
28-Jul-08 |
608 |
Kimberley Consolidated |
KCM |
Hein Puren le Riche |
Buy |
15-Aug-08 |
480 |
Allied Electronics Corporation Ltd |
ATNP |
Director of a subsidiary |
Options exercised |
31-Jul-08 |
347 |
Mondi Ltd |
MND |
Company secretary |
Buy |
07-Aug-08 |
125 |
Mondi Ltd |
MND |
David A Hathorn |
Buy |
07-Aug-08 |
125 |
COMMENTS 3
Comments on this article are closed.
Between 7/12/2007 and 17/01/2008 the two directors,Swart and Van Niekerk bought 7 494 966 shares in the market according to Moneyweb stats.According to this article 63.7% of the shares are held by Swart(19%),Van Niekerk(18.7%),AIG(14.8%) and Stanlib(11.2%).The funds holding this share according to moneyweb are Coris Capital General Equity(118200),Stanlib Small Cap(2289400) and Stanlib Value Fund(13000000). Now Van Niekerk is writing a cheque for a SSF worth 31million shares. The operating income increased by 124% but the expenses increased by 164%.The share issuance increased by 35%.The net asset value of the share is R1.34 and the Tangible asset value per share is R0.55. According to the JSE stats ,PE at 57.25,EY at 1.75 it makes a profit of -R61million and it pays no dividend. Where is the value in this share or am i missing something?Is the only value in a share price increase………so maybe it goes to R10?? Sjoe………FIRSTRAND looks dead cheap at R15. Please help explaining this share……………………………..!
According to Moneyweb stats Swart and Van Niekerk bought 7 494 966 shares between 7/12/2007 to 17/01/2008.According to this article 63.7% of Blue shares are in the hands of Swart(19%),van Niekerk(18.7%),AIG(14.8%) and Stanlib(11.2%).Funds holding this share according to Moneyweb stats are Coris Capital Equity Fund(118200),Stanlib Small Cap Fund(2289400) and Stanlib Value Fund(13000000). On the 12/08/2008 van Niekerk takes up a SSF to the value of 31 000 000 shares. Operating income up by 124% but operating expenses up by 164%.Headline earnings increased by 39% but share issuance increase by a whopping 35%.The net asset value of the share is only R1.34 and the Tangible asset value only R0.55. According to JSE stats the PE of the company is 57.25 and the EY 1.75 and the company pays no dividend! The companies profits -R61 million. My question :Where is the value of this share relating to the stats mentioned above?Is it only in a share price increase or what? Someone please explain this to me! Firstrand looks dead cheap to me at R16.00 with relation to this share…………..so does Didata,Abil,Billiton,Mittal ect ect ect ect. Please help,and please don’t delete my question again!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The high PE, P/B etc implies a very high growth rate (in absolute terms and also relative to the other shares you mention). After doing my own analysis, I think that the growth rate in EPS for the next few years will be below expectations – caveat emptor at these prices… Taking this argument further, BFS could be a prime candidate for shorting. You have a fundamental valuation way below the current share price and you know that Van Niekerk will get a margin call over R200m of stock if the price drops by around 25%. Add to that any big redemptions out of the units trusts and you’ve got yourself a meltdown! PS Why would I share this view and not just quietly profit from it myself? Because I can’t get my hands on stock to borrow for a short sale!
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