Momentum Metropolitan Life’s New Employee Share Plan
Early in September this year, Momentum Metropolitan Holdings (MMH) announced its intention to establish a broad-based employee share ownership scheme covering all of MMH’s current, and certain future, permanent employees. The plan is to acquire a total of 44 924 261 of MMH ordinary shares (that’s about 3% of all shares issued) - 26 936 688 will be from treasury shares and 17 987 573 will be acquired from the open market. The shares will sit in a trust, the Momentum Metropolitan iSabelo Trust. The transaction will be financed with money from the sale of “A” Preference Shares (price: < R350 million) and “B” Preference Shares (cost: <R700 million) sold to MMH and ABSA by a special entity that will be set up to facilitate transactions for the Trust. The transaction will be led by Standard Bank Corporate and Investment Banking.
The Trust will be structured such that at least 85% of the economic benefits from the scheme will accrue to black employees and at least 55% to black women employees. Allocation of the trust’s units will be at the instruction of MMH, but will also follow an allocation criterion. After a period of 7 years, the trust units can be changed into trust shares.
The purpose of this entire transaction is to contribute towards the company’s BBEE objectives. As such, at all times, the majority of the trust’s unit holders and trustees will be black people (especially black women) as defined by the BEE codes
Accentuate Might be Set to Delist from JSE
Pruta Securities (From Jersey) has made an offer to acquire a controlling stake in Accentuate, of which the Accentuate board is reviewing. Following this acquisition, the plan is to remove Accentuate from the JSE main board. Pruta already held 8.61% of Accentuate (about 12 million shares) and subscribed for an additional 41.81 million (sold at 10c each thus costing R4 180 985 settled in cash) , which brought their shareholding to 53.81 million (29.7%). Pruta is not alone though. They will execute this with Jacana Investments (a Channel Islands company and 9.72% Accentuate shareholder).
This couldn’t have come at a better time for Accentuate. They have been facing liquidity problems and consistent losses for a while now. In 2019 and 2020, they have sold off various parts of their business and issued loans to stay afloat. They also cited the fact that they have not seen any material benefits from being on the JSE, having not received much institutional shareholder support to justify the costs of the regulatory processes, Listings Requirements, compliance and associated costs with being a listed entity. The listing costs have had a significant adverse effect on the business
Linde Offers to Buy and Delist Afrox
In yet another episode of “Flee the JSE”, Linde (American) has made a firm offer to purchase African Oxygen (Afrox). They plan to delist all Afrox shares from the JSE and Namibian Stock Exchange after the acquisition. Owing to Afrox’s low share liquidity, which is not attractive for potential investors, Linde sees fit that Afrox is better off unlisted - listing provides little benefit to Afrox Shareholders. Linde also believes they can improve integration amongst the Afrox operations with other Linde operations, which can be better achieved and more easily expedited if unlisted.
Linde is prepared to fork out a 58% premium on the Afrox shares (so this is the calculation for that: the average price of Afrox shares over a 30-day period is R17.21. a special dividend that Afrox will issue in relation to this transaction is R3.89 per share. Subtracting the dividend from the average price, we get a R13.39 share value… the 58% premium is in relation to the R17.21 average price and the R13.39). after the transaction, Linde will fully own Afrox.
Author: Nkanyiso Nyawose