Long4Life has become the latest company to potentially disappear from the JSE.
The vehicle headed by Brian Joffe is the fourth listed entity on the JSE to announce a buyout offer this week alone.
It announced yesterday morning alongside the release of its interim results that it had “received an unsolicited expression of interest to acquire all the shares” in the company. It said its board is evaluating the offer “and will update shareholders should there be any further developments”.
Shares in Long4Life jumped 16% on the news.
How many listings from the 2006/7 boom remain?
RMH (formerly RMB Holdings), which has a stated intention to monetise its remaining property portfolio – “in an orderly manner, to return the maximum value to RMH shareholders” – has received two approaches for separate parts of its portfolio.
Brightbridge Real Estate, based in Cyprus, has approached RMH with a R1.75 billion offer for all its assets excluding its Integer portfolio. Effectively, this comprises a 27.5% stake in Atterbury Property Holdings in SA, 37.5% of Atterbury Europe and 10.9% of Divercity Urban Property Fund. RMH says these assets had a net asset value of R2.9 billion as at March 31.
The second formal approach, from Fledge Capital, is for RMH’s 50% shareholding in Integer 3. This had a net asset value (NAV) of R168 million as at March, with Fledge’s offer being R60 million.
Global radio frequency technology group Alaris Holdings (which listed as Poynting) announced on Monday it had received a firm intention notice from a consortium to buy out and delist the business. The R161 million offer is at R4.20 per share, a 22% premium to the 30-day volume weighted average traded price of Alaris shares.
Also on Monday, CSG Holdings said it had received a non-binding indicative offer from major shareholder ARC Fund (via UBI) to acquire the 75% of shares in the company it doesn’t already own and then delist the business. The proposed offer is set at 35c, with the company trading between 20c and 30c prior to the announcement.
Combined, these four companies have a market value of nearly R6 billion (with Long4Life and RMH together comprising R5 billion of that number).
There are three large caps (one of which also has preference shares listed) also currently in various stages of buyouts or potential offers.
The largest of these, Distell, with a market value of R41 billion, has been in discussions with global brewer Heineken since May. The brewer approached it “regarding the potential acquisition of the majority of Distell’s business”. At the end of September, it said “satisfactory progress has been made with regards to the discussions with certain issues still to be agreed”. It previously undertook to provide shareholders with more detailed information by the end of the third quarter.
Shareholders of Liberty Holdings on Wednesday unanimously voted in favour of Standard Bank’s offer to acquire the remaining 46% in the insurance and property business which it did not already own. Liberty shares and Liberty preference shares will be delisted when the transaction closes in Q1 next year.
In July, Dubai’s DP World announced that it had entered into an agreement to acquire Imperial Logistics for an estimated R12.7 billion in cash. The offer of R66 a share was at a 34% premium. In September, 86% of Imperial shareholders voted in favour of the offer.
If regulatory approvals are received as expected, Imperial will be delisted from the JSE in mid-February.
Last week, Nedbank announced it would buy back all its preference shares for R3.5 billion and delist these. Sasfin bought back all its preference shares in July of this year.
Aside from these larger transactions (and potential deals), a further four companies may be delisted in the coming months.
The offer from Canada’s Volaris for Adapt IT is underway.
Stellar Capital Partners will use its own cash to repurchase all its shares and delist the business. If approved by shareholders, the company will delist on November 30.
The Bell family is continuing with its efforts to buy out minorities and delist Bell Equipment.
PSG’s Zeder Investments said in April that it “had received several approaches from third parties interested in acquiring a number of Zeder portfolio investments”. It said then it anticipated that “the evaluation of these approaches may take several months to finalise”. At the end of last month, it said “while substantial progress has been made in this regard” since the multiple cautionary announcements, “the impact of the Covid-19 pandemic has delayed certain aspects of the process”.
Analysing the trend …
In a report, Allan Gray’s Nadia van der Merwe and Stephan Bernard say “the downward trend in the number of company listings over the past decade is mostly a result of delistings among small businesses that fall outside the acceptable size and liquidity range of the average asset manager”.
“During 2020, there were 19 company delistings, 16 of which were smaller than mid-cap. In 2021 to date, there have been 11 company delistings, with 10 smaller than mid-cap.
“Although the number of delistings has exceeded that of new listings since 2016, the market capitalisation of new listings has exceeded that of delistings every year since as far back as 2008.”
They add that: “The number of companies with market capitalisations above R5 billion [in 2021 rand value] has increased over time – from 83 in 2000 to 113 in 2010, and 121 in 2021. This suggests that the investment universe for larger investors has actually expanded over time.
“Drilling down one further layer, it is interesting to note that many of the more prominent delistings of recent years have been for reasons that suggest value and confidence in future returns, rather than because of businesses failing.”
The pair note that: “Delistings include Clover, Pioneer Foods, Assore and Comair. All but Comair were takeovers or management buyouts, indicative of the attractive levels at which many of the shares on our market trade.
“News that Heineken is considering the acquisition of Distell and Standard Bank’s intent to buy out Liberty are further supporting examples.”