ANOTHER ACTIVIST KEEPS CORPORATES ON THEIR TOES
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.