Patrice Motsepe. Picture: MARTIN RHODES
Patrice Motsepe. Picture: MARTIN RHODES

Billionaire Patrice Motsepe’s investment holding company African Rainbow Capital (ARC) will increase its stake in Alexander Forbes as the firm undertakes a major shareholder restructuring.

Alexander Forbes announced via Sens on Wednesday that its largest shareholder, Mercer Africa, which owns a 34% stake, intends to dispose of its entire investment of 442.8-million shares in Alexander Forbes Group Holdings.

To facilitate this, ARC will acquire 193-million shares worth R1bn, which will increase the company’s stake to 28.6%. In a subsequent transaction, ARC will swap the existing shares it owns in Alexander Forbes for shares in the JSE-listed parent  company Alexander Forbes Group Holdings.

Sandwiched between the two ARC transactions will be a repurchase by Alexander Forbes of 200-million shares owned by Mercer at a price of R5.15 per share, a slight discount to Wednesday’s closing price of R5.30 per share.

The transactions are designed to “reposition ARC as the key strategic anchor shareholder and, critically for Alexander Forbes, a black empowerment partner.”

After implementation of the transactions, ARC will own 33.9% of the issued share capital of Alexander Forbes. Mercer will retain a stake of about 4.5%.

Mercer and Alexander Forbes will continue to collaborate, and the existing strategic alliance between the two companies will remain unaffected.

“Both companies remain fully committed to maintaining a close relationship, to ensure that the enhanced value proposition for Alexander Forbes’s clients is well preserved and strengthened,” stated the companies.