COMPANY COMMENT
Appraisal action ruffles share valuation plumes
While the FTSE JSE-listed Sapy index could soon be quite different
The appraisal action that has just been brought by shareholder activist Albie Cilliers will provide much entertainment around, and perhaps even a little insight into, the issue of share valuations. Cilliers has approached the High Court in Cape Town in a bid to get a fair value for his KWV (renamed La Concordia Holdings) shares. If that seems like an easy enough task, be assured it is not. So difficult, in fact, that the Companies Act provides for the court to employ a specialist to guide the judge through what will inevitably be extremely contested terrain. An army of lawyers, accountants and financial experts will be trying to influence the judge’s view in a case that will set precedent for years. Expect "fair and reasonable" opinions to be closely interrogated during the court process and to emerge very scathed. In particular, the "fair and reasonable" opinion issued by KPMG will be deconstructed word by word. Like all such opinions, KPMG’s came with a litany of caveats, provisos...
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