Anchor’s delisting gets overwhelming go- ahead
Shareholders who do not want to sell their stock can still hold shares in the private company
Shareholders of private investment firm Anchor Capital voted in favour of a decision to buy out minority shareholders and delist from the JSE, on Thursday.
The firm, which held its AGM on Thursday, announced on November 13 its intention to go private and offer shareholders R4.25 a share — 7.59% higher than the closing price the day before and about 50c higher than the month average R3.75 before the offer.
Shareholders who don’t want to sell their stock can still hold shares in the private company. The company said at the AGM that private shareholders who retained shares could sell them in future, provided there were buyer, and it would allow trade as if it were a public company.
The various resolutions on the share buyback all achieved over 97%, showing resounding support for the delisting, scheduled for February 2021.
Anchor Capital CEO Peter Armitage told Business Day: “This is a great outcome for all shareholders and we are pleased we got the support.”
A growing number of small-cap firms have been delisting from the local bourse due to the high costs of remaining listed, and lack of interest by the market in investing in firms with smaller market capitalisations.
Anchor Capital said in November that small-cap shares were moving sideways in a no-growth economy.
It said in a statement when it announced the planned delisting that: “Anchor’s share price has remained stagnant for an extended period, partly as a result of modest performance but notably due to a lack of investment appetite in 'small-cap' stocks in SA.”
The delisting will allow it to save money and thus compete better with its unlisted competitors and enable it to increase its debt levels at the current low interest rates to invest more capital.
The financial services holding company, which was founded in 2012 and listed in September 2014, has R64.9bn worth of assets under management.
Minority shareholder Anthony Clark was unhappy with the price, previously saying it was “cheeky and opportunistic, and undervalued Anchor” in the light of its likely future earnings. He raised his concern at the Thursday AGM.
The company's independent director, Tinyiko Mhlari, said the price was determined after an independent expert valued the business, using various management forecasts and the company believes the price is “fair and reasonable”. The expert's valuation of the share price was provided as a range, and Anchor Capital chose a price for buying back shares at the “upper end” of the range, she said.
When determining the price, Anchor Capital also looked at “affordability” of what it could borrow, as it is taking on up to R280m debt to buy back shares.
The share price has traded between R2.80 and R4.33 since mid 2018. The stock has traded below R4 since about February.
The new corporate structure will result in the company having three core shareholder groupings: management, Masimong and Capricorn Capital Partners.
Additional reporting by Alistair Anderson
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