It is offering shareholders a 65% premium to the average trading price of the last month. From Moneyweb.
Financial services group Sasfin has announced plans to delist from the JSE, offering minority shareholders R30 a share – a 65% premium to the average price of R18.16 over the last 30 days.
The offer will be funded by WIPHold and the Sassoon family investment vehicle Unitas, which will subscribe for shares in the wholly-owned subsidiary Sasfin Wealth.
This will come as a blow to the shrinking JSE, which has seen a steady rush for the exit door in recent years, with the delisting of companies like Royal Bafokeng Platinum, PSG Group, Liberty, Mediclinic, Massmart and Distell.
Bell Equipment also announced plans for a JSE delisting on Monday.
Sasfin CEO Michael Sassoon tells Moneyweb that the minority shareholders get to call the shots on the deal and are being treated fairly in the process.
They now have the option of accepting the deal and selling their shares or remaining as minorities in a refocused financial services group.
The delisting announcement follows poor results for the six months to December 2023 and a Sens notification in February announcing the sale of its commercial property and capital finance businesses to African Bank. It has already exited its specialised lending and forex businesses, all of which are capital-heavy.
Focus areas
The restructured group will focus on businesses that are less capital-hungry, such as the Sasfin Wealth advisory business. The business comprises private wealth and portfolio management, asset management, asset consulting, healthcare consulting, as well as equity and fixed income broking.
The group reported a 7.1% drop in revenue and 62.5% in headline earnings for the six months to December 2023, as it accounted for credit impairments and write-downs in its private equity portfolio.
Read: Credit impairments hit Sasfin’s half-year earnings
Sasfin Wealth, however, remained steady, with assets under management of R64 billion and income growing by 3.2%.
In a statement issued on Monday, Sassoon said, “These proposed transactions, subject to the relevant shareholder and regulatory approvals, are the next step in our strategic reset announced in March 2023. The aim is to simplify the group by backing our core businesses and ultimately unlock value for stakeholders. The support from our major shareholders and management team is testament to their belief in the future of Sasfin and our strategy.”
Deal details
Following the proposed cash subscriptions from WIPHold and Unitas, Sasfin Wealth will make an offer to acquire up to 10% of Sasfin Holdings. The offer provides minority shareholders with the option to remain invested or exit at a substantial premium to the current market price. These structural changes enable the proposed delisting of Sasfin Holdings from the JSE.
Read:
Sars targets Sasfin over dealings with alleged ‘Gold Mafia’ clients
Sasfin rejects R4.8bn claim from Sars
Sasfin’s four largest shareholders, including Wipfin and Unitas, hold about 88% of the group. Wipfin and Unitas hold 25.2% and 47.9% of Sasfin Holdings.
In terms of the proposed deal, the management of Sasfin Wealth will acquire 15% in the enlarged share capital of Sasfin Wealth for R107 million, funded in whole or in part with vendor finance.
Sasfin Wealth will make an offer to buy out minorities in Sasfin Holdings at R30 a share. The offer remains open for 10 days.
Among the reasons cited for the delisting are the high and ongoing costs of remaining listed, in particular, because of the limited free float in the stock and an improved ability to execute the group’s business strategy in an unlisted environment.
“WIPHold has a long track record in investing in the financial services sector. We want to increase our investment in Sasfin as we believe in the strategy of the business and its ability to deliver value to our shareholders,” said WIPHold founder Gloria Serobe.
