AfroCentric plunges after announcing call option
AfroCentric's principal subsidiary is medical scheme company Medscheme
AfroCentric's share price fell 14.6% to R4.70 on Tuesday morning after it announced it was exercising a call option to turn its 26%-owned pharmaceutical distribution company, Activo, into a wholly owned subsidiary in a deal valued at R588m. Its share price later recovered to Monday's closing price of R5.50. In 2014, AfroCentric acquired its initial 26% of Activo for R20m as part of a deal in which it acquired Activo's majority shareholder, WAD, for R401m. Because it is a related party transaction, AfroCentric said it obtained an independent valuation for Activo. WAD will receive R410m for its 51.6% of Activo from its parent company, while Activo's founders, SE Claassen and JPF Martin, will each receive R89m, which will be paid half in cash and half in AfroCentric shares, Tuesday's statement said. AfroCentric's principle subsidiary is medical scheme company Medscheme. "The acquisition of absolute control of Activo is therefore consistent with AfroCentric’s growth objectives through ...
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