Top deals making headlines this week
In focus this week: Mediclinic, PepsiCo, Intu Properties, Telkom and more.
South Africa’s competition authorities have cleared the acquisition of a majority interest in Matlosana Medical Health Service in the North West province by private hospital group Mediclinic after the bid was initially blocked by the Competition Tribunal, which feared that the move would raise costs for patients.
In a statement released on Friday, Mediclinic said the approval was granted by the Competition Appeal Court, with the effective date around mid-year. In 2019, the Competition Tribunal prohibited the merger between Mediclinic Southern Africa and Matlosana in the North West province, saying it would result in higher tariffs for the hospitals that would be acquired, among other reasons. Read more here.
Financial services and technology group Net1 UEPS, which is listed on the Johannesburg Stock Exchange and US Nasdaq Stock Exchange, is planning to use part of its R3.4 billion proceeds from the sale of its South Korean payment processor, KSNET, to grow its operations in South Africa.
Net1 offers debit, credit and prepaid processing and issuing services for major payment networks.
“The sale of KSNET marks an important milestone in the reinvention of Net1 as a fintech company focused on the underbanked, as it allows us to inject the appropriate liquidity in our businesses to scale our operations in SA, Africa and Europe, while also being able to return significant capital to our shareholders,” said CEO Herman Kotzé (pictured). Read more here.
South Africa’s Competition Commission has recommended on Tuesday that the Competition Tribunal give the green light to a R24 billion transaction that will see PepsiCo take over Pioneer Foods, which was initially announced in July 2019.
The deal’s benefits are “significant”, the Commission said, while recommending that it be approved subject to conditions including job creation, local investment and a minimum R1.6 billion Broad-Based Black Economic Empowerment transaction. In 2019, New York-headquartered PepsiCo offered R110 per share – a premium of around 56 percent – to acquire Pioneer Foods, which manufactures brands including Weet-Bix, Sasko, Pro-Nutro and Spekko rice. Read more here.
Intu Properties was dealt another blow on Tuesday after a Hong Kong-based investor pulled out of plans to take part in the shopping centre group’s emergency cash call – a day after it had confirmed talks.
The debt-laden company, which is listed in South Africa on the Johannesburg-Stock Exchange, said it had been informed by Link Real Estate Investment Trust “of its intention to no longer participate in a recapitalisation of the company”. The group is struggling under a £4.7 billion (about R89.9 billion) debt mountain and had previously confirmed that it would announce an emergency cash call, expected to be worth at least £1 billion (R19.1 billion), alongside its annual results due later this month. Read more here.
Telkom has called on the Competition Commission and the Independent Communications Authority of South Africa (Icasa) to investigate the recently announced roaming deal between Vodacom and Liquid Telecom.
The Competition Commission is a competition watchdog in South Africa and Icasa is the regulator of the telecommunications industry in the country.
“Telkom has raised concerns with regulators that the recent agreement between Vodacom and Liquid Telecoms announced on 04 February 2020 is anti-competitive and would further entrench South Africa’s skewed market structure,” Telkom is quoted in a MyBroadband article. “This is consistent with the Competition Commission’s rejection of a proposed merger between Vodacom and Neotel in 2015.” Read more here.
MTN Group said on Tuesday improved operational performance across the business coupled with the proceeds from asset sales delivered healthy profit growth in 2019, according to a Bloomberg article.
Headline earnings per share increased by between 30 percent and 50 percent in 2019, even after a downward adjustment from a change in reporting standards, the Johannesburg-based telecom company said in a statement after the market closed on Tuesday. While MTN provided little further detail, a spokesperson highlighted the group’s biggest market of Nigeria as a significant high performer.
Disposals include minority stakes in two tower joint ventures for $540 million (about R8 billion) also helped support growth, she said. Read more here.
Investec Asset Management
Investec’s shareholders have voted in favour of the proposed separation and listing of its asset management business, Investec Asset Management, which was renamed Ninety One.
The split will see Investec break away into Investec Bank & Wealth and Investec Asset Management. Shareholder approval of the transaction was the last outstanding requirement as regulatory approval has already been granted. The expected first day of trading is March 16, with the unit expected to be listed in London and Johannesburg. Read more here.