Astoria share up on RAC offer
Investment company RECM & Calibre (RAC) has pitched an offer to take full control of global investment company Astoria. RAC, which has already built a commanding 28.75% stake in Astoria, detailed an offer of R13.50 a share to all Astoria shareholders on Friday.
Investment company RECM & Calibre (RAC) has pitched an offer to take full control of global investment company Astoria.
RAC — which has already built a commanding 28.75% stake in Astoria — detailed an offer of R13.50 a share to all Astoria shareholders on Friday.
The offer represented a discount of about 13% to Astoria’s closing share price on Thursday. The share price jumped almost 5% to R12.29.
Astoria recently indicated a net asset value of $1.20 a share (or R15.12 a share) as at the end of March.
The offer will be settled in cash up to a maximum of R355m, with RAC shares issued as a top-up consideration.
RAC said the offer was conditional on snagging a stake of more than 50% in Astoria.
It seems likely that Mauritius-domiciled Astoria’s investment mandate would change if RAC — headed by well-known value investor Piet Viljoen — gained full control of the company.
IF ANCHOR IS REMOVED AS FUND MANAGER, THEN A BREAK FEE OF AROUND R90M COULD BE TRIGGERED
Astoria’s main value lies in a portfolio of large global stocks like Facebook, Apple, Admiral Group, Starbucks, Home Depot, JPMorgan Chase and Hastings Group Holdings. It also has a stake in property group Echo Polska and exposure to private equity funds.
Market whispers suggest that RAC could look to reversing certain of its existing investments into Astoria, which has certain structural and tax advantages.
RAC’s biggest investment is alternative gaming group Gold Rush, which has been seen as a candidate for a separate listing in the JSE. Other holdings include Trans Hex Group, Universal Capital Partners, Distribution & Warehousing Network (Dawn) and unlisted investments like La Concorde, College SA and Outdoor Investment Holdings.
RAC said in a Sens statement it intended “to provide its proven capital allocation framework to the board of Astoria for implementation going forward”.
Astoria’s portfolio is managed by JSE-listed asset management firm Anchor. If Anchor is removed as the fund manager, then a break fee of about R90m could be triggered.
This would mean a significant once-off windfall to Anchor, but the company would lose the annuity income flows.
Astoria is expected to respond to the RAC offer on Monday.