Sanlam shares shrug off takeover delay fears in Morocco
Sanlam’s share price was unaffected by reports that diplomatic hurdles could delay its planned takeover of Moroccan general insurer Saham.
People who had reliable knowledge about the progress of the deal were not concerned at this stage, Jean Pierre Verster, a Fairtree Capital portfolio manager, said.
Moneyweb reported on Tuesday that political tensions between SA and Morocco over SA’s stance on the disputed territory of Western Sahara and its recent decision not to support Morocco’s 2026 Soccer World Cup bid were delaying regulatory approvals and that Morocco’s insurance regulator has missed the deadline for approving the deal.
But Verster said it was not certain at this stage if there would be delays and what their impact would be.
"One can’t really say how this might affect Sanlam. Even if there are delays, we don’t know how long they will be. But there doesn’t seem to be any major risk for Sanlam because financing for the deal will only be put in place once all approvals have been received," said Verster.
Sanlam already owns an almost 47% stake in Saham and said in March that it aimed to buy the remaining 53.3%.
At the announcement of the company’s interim results last week, Sanlam CEO Ian Kirk said the group was on track to finalise the takeover by the end of 2018.
On Wednesday, the insurer again issued a statement saying the deal was not under threat.
"At the time [of announcing the takeover agreement] Sanlam indicated that the transaction was subject to the fulfilment of conditions precedent, including, among others, various regulatory approvals. A number of these approvals have been received, with only a handful of approvals outstanding.
"We are on track for the conclusion of the transaction by quarter four as earlier advised and in accordance with the originally envisaged timetable."
The two companies would communicate to the market the outcomes of the regulatory process once concluded, it said.