Top deals making headlines this week

In focus this week: Investec, Altron, SAP, City Lodge and more.  

Investec

Ninety One, the asset management arm of South Africa-based banking group Investec, said it was pressing ahead with its listing on March 16, despite the recent sell off in markets sparked by the spread of coronavirus.

The group said on Monday it had set a price range of 190 to 235 pence per share, valuing itself at £1.75 billion (R34.4 billion) to £2.1 billion (R41.3 billion). Global stocks fell 10.2 percent last week as concerns about the impact of coronavirus escalated, prompting speculation that stock exchange floats would have to be pulled.

“In spite of the current backdrop of market volatility and uncertainty, we remain committed to the execution of this transaction, because of its long-term benefits,” Hendrik du Toit, founder and chief executive of Ninety One, said in a statement. Read more here.

Altron

South Africa’s Competition Commission has approved JSE-listed technology group Altron’s acquisition of identity management security specialist Ubusha Technologies. Altron said on 9 December 2019 that it had made the offer to buy the company pending approval from the competition authorities, which has now been received.

“Founded in 2003, Ubusha — as a next-generation IT security services provider — enables dynamic authentication and authorisation, identity management and governance, and privileged account security for leading local and international banking, financial services, insurance, telecommunications and retail customers,” Altron said at the time of the announcement.

This acquisition was the springboard for the creation of a new division, Altron Security. Read more here

SAP

SAP is in talks to secure IT contracts in Ethiopia as the government seeks to attract more international companies to help prop up the economy of Africa’s second-most populous country, according to a Bloomberg article.

The German software giant agreed to work with Ethiopia’s state-owned electricity utility on a new billing system that will make it easier to monitor power use and payments, SAP Africa head Cathy Smith said in an interview. More opportunities may arise in areas such as voice over internet protocol (VoIP) phone calls, she said. “We are staying very close to what is happening in Ethiopia,” Cathy told Bloomberg. “The government has become progressive and forward thinking on technology.” Read more here.

City Lodge 

Hotels group City Lodge has been approved for a secondary listing on the A2X from March 11.

City Lodge’s listing will bring the number of securities available for trade on the exchange to 35, with a combined market capitalisation of R2-trillion. City Lodge CEO Andrew Widegger said on Wednesday the secondary listing would enable investors to save money through the A2X’s low cost structure, while also potentially attracting new investors. The group operates more than 7,000 rooms across SA, Kenya, Namibia, Tanzania, Mozambique and Botswana.

A2X CEO, Kevin Brady said: City Lodge…will be the first hotel group to benefit from a secondary listing on A2X as our low fee structure has been shown to narrow spreads and attract new liquidity thus helping to grow the overall market.” Read more here.

AJN Resources

AJN Resources has scrapped a plan to purchase a 10 percent stake in the Democratic Republic of Congo's (DRC's) biggest gold mine from state-owned gold firm Sokimo, buckling to pressure from Barrick, the operator and 45 percent stakeholder of the Kibali mine which opposed the deal.

The Canadian junior miner's shares tumbled nearly 50 percent last week reports said Barrick issued a cease-and-desist notice to block the Kibali stake purchase. “As a result of its due diligence and further information received, will not proceed with its proposed acquisition of Sokimo's 10 percent free carried interest in the Kibali,” the company announced in a release late on Sunday. Read more here.

African Phoenix

Investment holding company African Phoenix Investments (API), which rose out of the collapse of African Bank, said on Friday that it has terminated merger talks with financial services group Zarclear by mutual agreement.

API said that while there were strong operational and capital market benefits to the merger, it had instead decided to proceed with delisting from the Johannesburg Stock Exchange (JSE), after engaging with its shareholders. The two had said in 2019 they were considering merging. Earlier in 2019, Zarclear had paid R246 million to get a 22 percent stake in API.

Under the deal, API would have acquired the entire share capital of Zarclear, in an exchange determined by the ratio between the net asset values of the two companies. Read more here.

Tongaat 

Tongaat Hulett, South Africa’s heavily indebted sugar producer, said on Friday it would sell its starch business to Barloworld for R5.35 billion, including debt.

The company, which recently reported a headline loss of R314 million for the six months to end-September, will use the proceeds from the sale to repay a portion of its debt, which it aims to cut by R8.1 billion by March next year.

The former blue-chip company also intends to ask shareholders for about R4 billion in a rights offer. “Our agreement is to reduce debt by R8.1 billion by March 2021 and we have already met and exceeded the first debt repayment milestone agreed with our lenders,” said Tongaat CEO Gavin Hudson. Read more here.