JSE-listed investment company Anchor Group has announced it plans to delist from the JSE after six years, joining a number of other groups who are choosing to go private.
The financial services holding company, which was founded in 2012 and listed in September 2014, now has R64.9bn worth of assets under management.
It said on Friday that it would a make R4.25 per share offer to shareholders. If accepted, its offer would be worth R900m and would see it delist in 2021.
“This is an exciting next step in the evolution of our Group,” said CEO and founder Peter Armitage. He said the company now has more than 15,000 clients and that the company can better service its clients over the long term as an unlisted entity.
Shareholders would be offered R4.25 per share in cash, or to retain their shares in the delisted entity. This price represents an 11% premium to the 30-day volume weighted average price at the time of publication of the offer.
“It was important for us that loyal shareholders were given the opportunity to retain their stake in the company and participate in its future growth,” said Armitage.
Anchor’s chair and representative of large shareholder Masimong, Mike Teke, said the delisting would help Anchor become majority black-owned. “The proposed delisting will help achieve the objectives of facilitating Anchor becoming 51% black-owned and increasing management’s stake,” he said.
The new corporate structure would result in the company having three core shareholder groupings: management, Masimong and Capricorn Capital Partners. None of these parties will control Anchor, according to Teke.
The group has access to more than R450m to facilitate the delisting.
Anchor would buy back the shares of minority shareholders who wish to sell. It will fund this buyback with support from lender RMB, up to a maximum of R250m.
Armitage said the SA listed equity market has been very difficult to generate returns from for the past few years. But the cost of funding is now the cheapest in decades, with interest rates at their lowest in nearly 60 years.
He said, “It makes sense for the company to propose buying out shareholders who wish to sell at a premium to the listed price.
“We believe the SA market, particularly in the smaller company space, is not likely to attribute high earnings multiples to companies for some time to come. This has led to a number of delistings in SA, including in the asset management space.”