Assore CEO Charles Walters. Picture: FREDDY MAVUNDA
Assore CEO Charles Walters. Picture: FREDDY MAVUNDA

Mining group Assore’s share price surged by more than 80% on Tuesday after it announced its plans to buy out minority shareholders and de-list from the JSE.

The company, which has been listed on the JSE for 70 years, said on Monday evening that it would buy out its minority shareholders for R320 per share, for a total consideration of R7.8bn. Minorities hold 17.4% of the Assore’s shares. At 3.47pm the share was trading at R313, up 81.43%, after it closed Monday at R172.80.

“It’s a fantastic offer as it is more than an 80% increase from where Assore’s share price has been recently trading. People who bought at a lower price are now certain to sell at R320,” JM Busha Investment Group MD Joseph Busha said.

Sasfin Securities deputy chair David Shapiro said the offer was quite generous and that the company was giving current shareholders a price they would not question. “Assore is not a massive business in terms of the market. It was approximately a R20bn company and not heavily traded. Most of their businesses is Assmang and African Rainbow Minerals and if you wanted to access Assmang you could do it via African Rainbow Minerals. This was a good move on their part.”

Oresteel Investments, which is owned by the Sacco family and  Japan’s Sumitomo Corporation holds 52.4% of Assore’s shares, of which 26.1% are BEE shareholders and 4.1% members of the Sacco family.

“Their profits were down about 30% last year and the company showed difficulty but I think they have very ambitious plans to expand the business and there is no reason to be a public company to do so,” said Shapiro.

“This offer, which we have been contemplating for sometime, gives some of our long-standing and faithful minority shareholders an opportunity to exit their Assore shareholding at a fair long-term valuation, and at a significant premium to the recent market,” CEO Charles Walters said.