Listed investment company RECM and Calibre (RAC), which holds 29% of Astoria, has requested that a special general meeting be held at which shareholders will be invited to vote for the appointment of a new director to the board of Astoria.
Astoria is a globally focused investment company that was launched by and is managed by listed asset manager Anchor. It is listed on the Mauritian stock exchange, with a secondary listing on the JSE.
It was listed in 2015 at R14.23 and is now trading at R12.80, a discount to its net asset value (NAV), which was $1.20 at September 30, 2018 ($1.14 at June 30, 2018 and $1.16 at September 30, 2017).
RAC has been engaging with the Astoria board for the better part of a year. It quietly built up its initial stake in the business and in March signalled its intention to make an offer to shareholders for their shares – or a portion of them.
This was blocked by Astoria, which instituted legal proceedings against RAC and its subsidiary, Livingstone Investments, on the basis that the offer was in breach of the Securities Act and Takeover Regulations, among other transgressions.
“We would like to make an offer to shareholders – it is their prerogative to say yes or no. But there is a pending court case that we need to get through to make the offer to shareholders,” says Jan van Niekerk, a director of RAC.
Thus RAC proposed that a new director – of their choice – be appointed to the board. “The easiest thing would have been for Astoria to accept our nomination, but this is also being dragged out,” he says.
“I think it’s a fair request [to have a director on the board],” says Peter Armitage, CEO of Anchor and a non-executive director of Astoria. “My sense is that the board, as a result of the hostile takeover attempt and litigation, has decided to put this to shareholders.”
The Astoria board is currently considering options to unlock the value for shareholders in light of the discount in the Astoria share price relative to NAV. This could be in the form of a special dividend. “We feel this process is also being dragged out and would like to provide some input,” says Van Niekerk.
Armitage is sanguine on this point too. “At the end of the day, shareholders want the same thing – to unlock value. The question is how. It is recognised that all investment holding companies are trading at a substantial discount to their NAV.”
At the end of September, 73.7% of the group’s funds were invested in listed global equities (7.9% in niche funds and private equity, 1.8% in fixed income and 16.6% in USD cash).
Its top 10 direct listed equity positions include Apple, Kingswood Holdings, The Blackstone Group, Facebook, EPP NV, Admiral Group plc, Mastercard, Home Depot, Nike and JP Morgan Chase.
Further details of the meeting will be released by Astoria in due course.