Top deals making headlines this week

In focus this week: Afrimat, Quilter, EOH, Growthpoint Investec African Properties and more.

Afrimat

Afrimat, the South Africa-based industrial minerals company, has ditched its plan to takeover Universal Coal given the size and complexity of the deal.

In April, Afrimat made an offer for Universal Coal, which operates in South Africa. It offered a maximum price of A$0.40 (US27c) a share, a deal that would be worth about R2.15 billion. At the time, Afrimat CEO Andries van Heerden said the deal could make sense as South Africa – via power utility Eskom – was set to rely on coal-fired power stations for at least another 20 years. On Wednesday, the company pulled the plug on the deal. Read more here

Quilter

London-based Quilter is exploring the possible disposal of its life insurance business. Quilter, which is Old Mutual’s former wealth management business, said it is considering selling its Old Mutual Wealth Life Assurance unit.

Quilter, which was spun out of Old Mutual in June 2018 through the insurer’s managed separation process, said on Thursday it was undertaking “a strategic review” of its “heritage life assurance business”, which could result in a sale. Read more here.

Dimension Data

Japan’s telecommunications company Nippon Telegraph and Telephone Corporation (NTT Corporation) has launched a new entity called NTT, which is set to provide technology and business solutions around the world.  

The formation of NTT, which will become a US $11 billion business, was made possible by the collaboration and merger of 28 companies, including South Africa-headquartered information technology company Dimension Data, NTT Communications and NTT Security.  NTT Communications and NTT Security are subsidiaries of NTT Corporation. Read more here.

Growthpoint Investec African Properties 

Pan-African real estate investment trust (Reit) Growthpoint Investec African Properties (GIAP) has concluded the acquisition of 97.5 percent in Achimota Retail Centre, a prime shopping centre in Accra, Ghana.

The asset was acquired from AttAfrica, which is a joint venture (JV) between JSE-listed Reits Attacq and Hyprop Investments, with other smaller stakeholders. GIAP, a JV between Growthpoint Properties and Investec Asset Management, has begun aggregating a portfolio of prime income-producing commercial assets in select cities across Africa. Read more here.

EOH 

South Africa-based technology group EOH has sold 70 percent of its Construction Computer Software (CCS) business to RIB Software for R444.4 million, which is as part of a strategic partnership agreement with the German buyer.

“The transaction is in line with EOH’s investment strategy to assist its intellectual property and software-based businesses to expand internationally,” the company said.

EOH said it would use the cash proceeds mainly to reduce debt. EOH management recently stated that it would unlock R1 billion in cash through strategic partnerships and targeted disposals in order to reduce the company’s debt. Read more here

Safari Investments

Safari Investments, which invests in shopping centres in rural areas and small towns, and Fairvest Property have advised shareholders of Safari's firm intention to make an offer to acquire all the issued shares of Fairvest.

The deal, which will involve a share-swap, is worth R3.5 billion. The deal will result in Fairvest shareholders exchanging their shares for shares in Safari at a swap ratio of 0.45 Safari shares for each Fairvest share.

The two companies had previously outlined plans for a “friendly merger”. The proposed tie-up will create a company with R6 billion worth of assets and adds impetus to consolidation in the local real-estate market. The implementation of the scheme will constitute Fairvest as a wholly owned subsidiary of Safari and will result in Fairvest's delisting from the JSE.

Safari and Fairvest, which both focus on lower-income retail properties, said on Tuesday that a deal will “unlock enhanced efficiencies in the management of both companies’ property portfolios”.

A2X

A2X Markets has added the first index-tracking funds to its trading platform amid growing demand for low-cost passive investment products. A2X was granted approval to also secondary list exchange-traded funds (ETFs) and exchange-traded notes in February 2019.

It said on Thursday Absa’s corporate and investment banking unit would secondary-list three JSE-listed metal ETFs from next Thursday. The ETFs to be listed are NewGold, NewPlat and NewGold Palladium, which track the rand price of gold, platinum and palladium, respectively.

The NewPlat ETF is the largest of the three with a market capitalisation of R12.5 billion.

A2X is a licensed stock exchange authorised to provide a secondary listing venue for companies and is regulated by the Financial Sector Conduct Authority of South Africa. A2X is a new entrant in the securities trading market, which was previously monopolised by the JSE. 

Astoria Investments

Captial market company Astoria Investments has entered into a conditional share purchase agreement with KPI (Nominees) for the disposal of Astoria UK's 17.46 percent interest in London Stock Exchange-listed Kingswood Holdings. The deal is worth £2,1 million.

KPI currently owns 62.4 million shares in Kingswood, it said, representing almost 39 percent of Kingswood's share capital. KPI is owned by Kingswood Property Finance Ltd Partnership, a private investment partnership owned by Gary Wilder, chief executive of Kingswood, and Jonathan Massing, non-executive deputy chair of Kingswood.

Meanwhile, Astoria currently holds 28.1 million shares in Kingswood, representing nearly 18 percent stake in Kingswood. The wealth management company said the agreement relates to all of Astoria's stake in Kingswood, which is valued at a price of 7.5 pence per share.