Top deals and corporate moves making headlines this week

In focus this week: Telkom, Growthpoint Properties, Industrial Development Corporation, Standard Bank, BDO and more.

Telkom

Telkom is considering making an offer to buy a majority stake in Cell C, a deal that would see the merger of South Africa’s third- and fourth-largest mobile-phone companies, according to a report by Bloomberg.

People familiar with the matter told Bloomberg that Telkom is seeking management control of Cell C. A successful merger between Cell C and Telkom’s mobile-phone division would create a business with about 21.5 million subscribers, according to Bloomberg. 

Read more here

Invicta 

Invicta, which is an investment holding and management company that businessman Christo Wiese is a major stakeholder in, has entered into an agreement to acquire the entire issued share capital of the Driveshaft Parts Group for an undisclosed sum.

The Driveshaft Parts Group specializes in the supplying of power transmission components such as drive shafts, universal joints, propshafts, propshaft components and centre bearings to the automotive industries.

The acquisition will form part of Invicta's Engineering Solutions Group (ESG). “Invicta’s position as one of the leading firms in the automotive and power transmission component industry is further enhanced by the acquisition of the Driveshaft Parts Group, which will form part of ESG, the company said in a statement.

Growthpoint Properties

Real estate company, Growthpoint Properties, has decided to invest further in Australia with an R908 million investment in Australian Securities Exchange-listed Growthpoint Properties Australia (GOZ).

The latest investment by Growthpoint, which is listed on the JSE, is expected to push its offshore investments closer to its target of 30 percent of total real estate investments.

Growthpoint said it is following its full rights in the funding call from GOZ for the acquisition of the Bank of Queensland headquarters in Brisbane. Growthpoint has a 66 percent shareholding in GOZ.

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Naked Insurance

Naked, an artificial intelligence (AI)-driven car insurance provider, said it received an additional R30 million investment from its founder investors, Yellowwoods and Hollard Insurance. The company will use the investment to grow its team, grow its customer acquisition and into new product lines.

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DAWN

Distribution and Warehousing Network (DAWN) said on Monday that it has received a buyout offer as the struggling company battles to deal with tough trading conditions stemming from South Africa’s economic difficulties.

The company, which makes hardware, sanitary ware, plumbing, kitchen and engineering products, said it has received a buyout offer from a South African company, whose share capital is owned by Derek Austin Tod and Luis Gonsalves Baeta.

DAWN said the amount payable in terms of the buyout offer will be a cash consideration of R0.01 per Share – valuing the offer at more than R6 million.

Read more here.

BDO

The merger of audit firms Grant Thornton and BDO South Africa has been completed and is effective from December 1, 2018.

The successful merger is expected to create the largest mid-tier accounting firm in South Africa with fees in excess of R1.2 billion. It will also position the combined firm as a credible alternative to the four largest auditing firms in South Africa.

The merger will result in a combined firm with 1 500 partners and staff operating from seven different offices in South Africa, and a Johannesburg office of almost 900 partners and staff.

Read more here.

Rebosis Property Fund

Real estate company Rebosis Property Fund announced on Monday that it plans to sell six office properties to various 100 percent black-owned property developers for up to R2.2 billion.

Rebosis said the sale of its properties forms part of its strategy to be a retail-focused real estate company and to reduce the company’s exposure to office properties. The company said the sale is also part of its efforts to reduce debt as the proceeds from the sale will be used to pay off existing debt.

Read more here.

Balwin Properties

Real estate developer, Balwin Properties, has entered into a sale agreement with its Rental Company in terms of which Balwin will sell 144 residential rental apartments in its Greenpark development and 12 residential rental apartments in its Amsterdam development for a total consideration of R98.4 million.

Balwin, which has a market capitalisation of R1.46 billion, is focusing on South Africa’s rental market to supplement its income and not just selling sectional title residential units. 

The company believes that there is an oversupply of residential property for sale that are aimed at the middle-income consumer segment.The deal is a related party transaction and, as such, a fairness of opinion has been obtained.

Corporate moves

Standard Bank

Standard Bank has appointed Peggy-Sue Khumalo (pictured) as CEO of its wealth division in SA.

The appointment ends Peggy-Sue’s 17-year long career at Investec and makes her the first black woman to head up Standard Bank’s wealth division. Peggy-Sue, who has been with Investec since the start of her investment career, will join Standard Bank in February 2019.

Read more here.

Industrial Development Corporation

The Industrial Development Corporation (IDC), which is South Africa’s largest development finance institution, has appointed Tshokolo Nchocho as CEO on a five-year contract. 

Tshokolo – whose experience in development finance and banking stretches over a 28-year period, including a lengthy period at the Development Bank of Southern Africa and as the CEO of the Land Bank –  replaces Geoffrey Qhena. Geoffrey stepped down in August 2018, ending his 13-year tenure as the CEO of the IDC.  His term of office ends on December 31, 2018.