Finweek English Edition - - Companies & markets -

COM­PA­NIES, ES­PE­CIALLY IN the fi­nan­cial sec­tor, must feel a shiver of ap­pre­hen­sion when they hear Roy McAlpine is tak­ing an in­ter­est in their do­ings. For, un­like many cor­po­rate ac­tivists – a term I seem to re­call McAlpine doesn't par­tic­u­larly like – he has a proven track record at the very top of the in­dus­try, not only in SA but in­ter­na­tion­ally.

You may re­mem­ber that he was one of the lead­ing op­po­nents of Old Mu­tual's at­tempt to snap up mi­nori­ties in its short-term sub­sidiary Mu­tual & Fed­eral, which was in­deed blocked. This week he was at it again, query­ing Lib­erty's R1,5bn buy­back of mi­nor­ity in­ter­ests in the Stan­lib as­set-man­age­ment arm.

While McAlpine would never in this case have been able to muster enough sup­port to block the deal, he was able to draw at­ten­tion to some im­por­tant con­sid­er­a­tions.

Firstly, it's clear that in­vestors weren't given ad­e­quate in­for­ma­tion about the deal in the doc­u­men­ta­tion, and the com­pany's re­tort that de­tails of, for in­stance, Stan­lib's prof­itabil­ity can be found else­where is fee­ble. In­vestors shouldn't have to go hunt­ing for such data.

Se­condly, it's clear that the orig­i­nal struc­tur­ing of Stan­lib was faulty, and that as­set man­age­ment is such a key – and prof­itable – part of a life com­pany's busi­ness that the in­ter­est in it shouldn't be di­luted.

And, thirdly, that the whole Stan­dard Bank/Lib­erty Hold­ings/Lib­erty con­trol struc­ture is ar­chaic and, what­ever Stan­dard says, not nec­es­sar­ily in Lib­erty's best in­ter­ests – a point Lib­erty founder Don­ald Gor­don, who once be­wailed to me that when he ran the group, it was Lib­erty that con­trolled Stan­dard, not the other way round, would to­tally en­dorse.

On the other hand, when McAlpine and fel­low-ac­tivist Theo Botha com­plain about how much Lib­erty has had to pay to re­gain full own­er­ship of Stan­lib, they're job­bing back­wards. This doesn't mean that Lib­erty was robbed in 2002 and 2003 when its stake in the as­set man­age­ment busi­ness was re­duced; given sub­se­quent mar­ket move­ments, any de­cent as­set man­age­ment is worth a heck of a lot more than it was five years ago.

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