Mauritius, here we come
RAC could well take another shot and reverse its deep-value portfolio into Astoria, which has offshore tax advantages
Astoria, the offshore-focused investment company domiciled in Mauritius, has cashed out most of its portfolio and opened the way for a new takeover offer from 29% shareholder RECM & Calibre (RAC).
Last year RAC — headed by investment industry heavyweights Piet Viljoen and Jan van Niekerk — pitched a cash and scrip takeover offer of R13.50 a share for Astoria, which has traded at a sizeable discount to its NAV since listing in 2015.
Astoria initially rebuffed the takeover effort by RAC, and in the process opted to liquidate its investment holdings to return capital to shareholders.
On Monday Astoria said a distribution of R12.82 a share would be paid to shareholders after most of the liquid positions — including Apple, Nike, Prudential, Walt Disney, Unilever, Facebook, British American Tobacco and JSE-listed global businesses such as Comair and Echo Polska — were sold off.
A total of $71.6m was raised with an unencumbered cash holding of $37m also earmarked for the large capital payment to shareholders.
Astoria recently ended its investment management agreement with Anchor. But it will be left with a small portfolio of mostly illiquid private equity holdings and associated cash commitments worth about $23m.
The development almost certainly paves the way for RAC — which withdrew its original takeover offer after Astoria announced plans to return capital to shareholders — to take another shot at gaining outright control.
After the capital repayment, the big target will be considerably smaller, perhaps allowing RAC to pitch a full cash offer this time, rather than an offer combined with scrip.
Van Niekerk confirms the group is still interested in Astoria’s structure and assets. "Once the capital payment is made, we will be talking to Astoria shareholders again. Certainly we can look at buying more shares in the market, or talking to shareholders about acquiring their holdings."
Market talk is that RAC intends reversing its portfolio of "deep value" investments into Astoria, whose Mauritius base gives it significant tax advantages.
RAC’s main asset is a controlling stake in alternative gaming group Gold Rush, which would then be left as a standalone listing.
*The writer holds shares in RAC