Minorities say they are economic hostages to the company
This article first appeared in Moneyweb.
It seems like a lifetime ago, but there was a time when the government seemed serious about privatising and listing the Airports Company of SA (ACSA), which manages SA’s nine airports. Private investors were encouraged to acquire shares at a pre-listing price, and many did, among them African Harvest Strategic Investments and empowerment shareholders who paid with debt.
Among the early investors was Aeroporti di Roma (ADR), which acquired 20% for about R890 million in 1998, or R8.19 a share. This valued ACSA at about R4 billion at the time. With no prospect of an IPO on the horizon, in 2005 ADR sold its shares to the Public Investment Corporation for R16.75 a share, more than doubling its initial investment.
But when minorities asked to be bought out, they were offered R12.87 a share – roughly 40% of ACSA’s net asset value (NAV), despite a 2014 valuation by Deloitte of R18 to R22 a share. In the same year ACSA did its own valuation exercise which valued the shares at just R10.36, less than half the R25.37 NAV a share disclosed in its own financial statements for 2014.