Stellar shareholders not all that inquisitive
Shareholders in Stellar Capital Partners are a hardy bunch. About 30 of them crammed into a conference room at Stellar on Thursday morning for a general meeting but, despite being urged by acting chairman Corrie Roodt, did not raise a single question during proceedings.
The silence was somewhat baffling, considering that Stellar’s shares are trading at an enormous discount to intrinsic net asset value. One might have expected at least one polite inquiry about initiatives to unlock the trapped value.
Stellar holds an influential stake in JSE-listed industrial supplies specialist Torre, which announced a small bolt-on acquisition just ahead of the meeting. But Stellar also holds commanding interests in asset manager Prescient and security services specialist Amecor — two companies well known for their cash-generation prowess.
Far be it for Business Day to ask questions at shareholders’ meetings, but surely a timely question would be whether there is any consideration being given to unbundling the stake in Torre to shareholders. Or, perhaps more succinctly, whether it is worth holding onto Torre in hope of a recovery and perhaps an opportunity to sell the business at a value markedly higher than the current market value.
The point is, the travails of Torre are distracting the market from paying more attention to the compelling operational attributes of Prescient and Amecor.
Another issue that might be top of mind of Stellar shareholders is — assuming no changes to the current portfolio structure — is whether share buybacks would be contemplated.
Hopefully, by 2018’s shareholders’ meeting these questions are no longer relevant and the share-price discount has narrowed considerably.
EOH founder and CEO Asher Bohbot’s surprise exit from the business has given rise to questions and speculation. Although he was expected to step down at some point, there were expectations that when he did, he would give a longer notice period. But on Monday, the company said Bohbot would step down at the end of June, go on a six-month sabbatical and then return as nonexecutive director.
This rattled the market, sending the share price down almost 7% as about a million shares changed hands.
It is yet to recover those losses, though it stabilised at about R127 on Wednesday
Founders and CEOs usually inform the market from anything between three months and possibly a year about their intentions to step down. This is meant to calm and prepare the market for changes and allows shareholders to familiarise themselves with the new executive and their strategic plans.
EOH and Bohbot are yet to explain the sudden departure, even if only to assure the market there is nothing sinister to this.
EOH has had a succession plan in place for years. it is possible that internally, it has been prepared, but if that was the case, the company miscalculated the market’s reaction.
Bohbot is a respected and outstanding CEO. He has grown the business into one of the best performing technology companies in the country. All eyes are now on new CEO Zunaid Mayet, who has been with the company for eight years. He has a tough task ahead of him to maintain the growth rate the market has come to expect.