Top deals making headlines this week

In focus this week: African Bank, AngloGold Ashanti, Nampak, Transaction Capital and more. 

African Bank

The South African Reserve Bank is forging ahead with the sale of its stake in African Bank. It is now looking for a transaction advisor to help it start looking at the feasibility of disposing the 50 percent shareholding the Reserve Bank due  to one of South Africa’s biggest banking scandals, when African Bank Investments collapsed under a mountain of bad debt in 2014.

In a statement published on the Johannesburg Stock Exchange News Service, African Bank said the Reserve Bank estimates that the sale could be completed within 18 to 24 months after finding a suitable buyer. African Bank CEO, Basani Maluleke (pictured), said the Reserve Bank’s exit would not affect the bank’s operations in anyway. Read more here.

AngloGold Ashanti 

The decision by AngloGold Ashanti to sell its last remaining South Africa-based assets is credit-positive as it will streamline the miner’s asset portfolio and optimise capital allocation, credit agency Moody’s Investors Service

AngloGold Ashanti said it will sell its South African assets for about $300 million (about R4.4 billion) to Harmony Gold, marking the end of its exposure to the country’s mining industry.

AngloGold Ashanti is selling its Mponeng mine and Mine Waste Solutions tailings recycling business to Harmony Gold.  The gold miner said in May it will review divestment options for its South African assets, which include the world’s deepest mine, as it looks to streamline its portfolio and focus on assets that deliver higher returns. Read more here.

Nampak

Africa’s largest diversified packaging manufacturer Nampak said on Tuesday that the Competition Tribunal has approved the disposal of its glass business, although certain conditions need to be fulfilled.

Conditions imposed by the tribunal are acceptable to the parties, Nampak said, with one condition still outstanding, related to certain material licences and permits. Nampak said in September that it had agreed to sell its glass business to Isanti Glass 1, an entity made up of a black-owned investment company and a local subsidiary of beer maker AB InBev, for about R1.5 billion. Read more here.  

Massmart

Massmart’s new chief executive Mitch Slape said on Wednesday he was not ready to let the firm’s Game department chain fail as the South African retailer undergoes a turnaround plan aimed at cutting costs and boosting profit and margins.

Mitch, a Walmart veteran who took over the top job in September, announced a turnaround strategy in January that will see Massmart exit poor performing categories such as fresh and frozen food and re-introduce basic apparel such as shirts and socks at its Game stores.

Majority owned by US giant Walmart, the retailer is also looking at improving stock availability, accelerating clearance of aged stock, re-negotiating rental leases, reducing promotions and introducing new offerings in Game. Read more here.

Transaction Capital

Transaction Capital, which finances the taxi industry in South Africa, said on Wednesday that three of its founders had sold shares worth R1.6 billion in order to diversify its shareholder base and improve liquidity. 

Jonathan JawnoMichael Mendelowitz and Roberto Rossi sold 69-million shares through their respective shareholding vehicles, via a bookbuild that was oversubscribed. The transaction equated to about 10 percent of the company’s market capitalisation. 

“Both new and existing institutional investors participated in the bookbuild, further diversifying the company’s investor base and increasing foreign ownership. The bookbuild has increased the company’s free float, which is expected to improve share liquidity,” Transaction Capital said in a statement.  Read more here

AB InBev

South Africa’s Competition Tribunal has found that global beer brewer, Anheuser-Busch InBev (AB InBev) did not breach conditions relating to its merger with SAB Miller (SAB) in 2016 through its exclusive branding rights with liquor outlets. 

In June 2016, the tribunal conditionally approved the multi-billion dollar merger between AB InBev and SAB. Distell had participated in the merger hearing at the time and made substantial submissions in relation to conditions that were ultimately imposed on the merger.

In November 2016, Distell laid a complaint with the Competition Commission, alleging that AB InBev had violated the merger conditions imposed by the tribunal. The commission investigated the complaint and found that AB InBev’s conduct did not amount to a violation of the conditions. Read more here.