Traders seemingly keen to haggle about price for Grindrod Shipping share on debut
The floatation of Grindrod Shipping got off to a slow start on Tuesday, with just 17 shares trading for R219 by 10.45am on its debut day on the JSE.
There was a wide discrepancy between the prices traders were willing to buy and sell the new share for, whose JSE ticker is GSH. One bidder was offering R142.85, about two-thirds of the R219 asking price.
At R219, Grindrod shareholders gained about 17% from the share splitting into a holding company of the shipping business and the remaining logistics and financial services businesses.
The original Grindrod share, with ticker GND, was trading at R12.77 on June 12 when shareholders on the register got to receive one Grindrod Shipping share for every 40 Grindrod shares held.
Grindrod’s share price tumbled 34% to R8.48 on June 13 after going "ex-distribution", but subsequently rebounded to trade at R9.44 on Tuesday.
At R9.44 plus a fortieth of Grindrod Shipping share at R219, investors would have seen the amount per Grindrod share held a week ago rise from R12.77 to about R14.92.
Part of the reason for the rally in Grindrod’s share price over the week has been the announcement that its bank is one of four contenders vying to acquire Mercantile Bank from its parent, Portuguese state-owned bank Caixa Geral de Depósitos.
Grindrod confirmed in a statement on Tuesday morning that it was bidding for Mercantile Bank in partnership with Arise.
"Arise is a leading African investment company that partners with sustainable, locally owned financial services providers in sub-Saharan Africa. The company, founded by three cornerstone investors namely Rabobank, Norfund and FMO, currently manages assets in excess of $700m and is operational in over 10 countries.
"Arise’s vision is to contribute to the economic growth of sub-Saharan Africa and the prosperity of its people by increasing financial inclusion and employment, strengthening rural development and poverty alleviation," Grindrod said.
Capitec issued a similar statement on Monday confirming it was one of the four bidders considering acquiring Mercantile.
"Capitec Bank is one of a number of interested parties whose nonbinding offer to purchase Mercantile has been accepted. Capitec Bank will now commence with a formal, in-depth due-diligence exercise to determine whether the opportunity presented by Mercantile fulfils Capitec Bank’s expectation to build the Capitec Bank business bank strategy," Capitec said.