THE GOOD, THE BAD & THE UGLY
WHILE OTHER FINANCIAL service counters have been selling off or unbundling shares in JSE Ltd, Stellenbosch-based PSG lists its 15% holding in South Africa’s stock exchange as a “key investment”. While regulations preclude any single investor holding more than 15% of the JSE, PSG has in effect circumvented that rule. The group’s empowerment associate – Arch Equity – holds another 4,9% of the JSE, giving PSG an effective holding in JSE Ltd closer to 17%.
Because Arch Equity is only 49% held by PSG, the arrangement can’t really be construed as a single party or possibly even a concert party holding. Of course, the big question for the JSE is whether PSG intends mobilising its stake as an active investor or whether the financial services group intends sitting back as a satisfied passive investor.
You would think PSG could afford to sit back for a while and enjoy the JSE’s strong performance, especially since group executive chairman Jannie Mouton has expounded on numerous occasions what a fine business the JSE is these days. We’d suspect that any issues PSG might in future have with the JSE would be evident in the voting for board representation.
Still, who knows how long PSG will retain its status as the major shareholder in SA’s bourse if rumours of massive foreign interest in the JSE are to be believed. Apparently, already 13% of JSE Ltd’s issued shares are in the hands of foreign investors, who are clearly willing to pay a premium for a wonderful monopoly.
WE ALL KNOW THAT Brait would up its offer for Shoprite (much like it did for Pepkor some years ago). While it was easy to call the bluff at Shoprite it isn’t always easy to do so elsewhere. Remember Sun International’s David Coutts-Trotter vehemently denying that the group’s offer for Real Africa Holdings would be upped? Then unforeseen circumstances forced Sun’s hand.
However, others have held firm with original offers – even when a share price has broken expectantly through the offer price mark. Punters should have plenty more opportunity to play the bluffing game this year…
AND THAT’S NOT ALL
ANYONE NOTICE the stronger trend in the share price of specialist retailer Verimark? The overriding question would be whether the upward shift in Verimark is simply a market readjusting its opinion of the group’s fundamentals (in lieu of so many positive trading updates after the buoyant Christmas period).
Or are we seeing some active buying ahead of a possible private equity interest?