Breaking ranks in Stellenbosch
PSG directors sell
TWO OF JANNIE MOUTON’S most senior cohorts at the Stellenbosch-based financial empire encompassing PSG and Capitec Bank have broken ranks this year by selling large tranches of stock into the market.
At PSG, executive director Chris Otto sold stock worth R13,8m last week, representing a significant reversal of his activities towards year-end 2006, when he bought just under 300 000 shares in the open market at R17/share.
This latest sale represents around 10% of Otto’s direct stake in the group, excluding the options he owns over another 1,2m shares. Otto was one of the founding fathers of PSG. In 1995 he and former stockbroker Mouton bought control of a JSE-listed recruitment company called PAG. They renamed the company PSG and persuaded a number of well-known Stellenbosch business personalities to take up shares in the group.
They then sold the old PAG business and started moulding the company into a financial services group. It soon incorporated a corporate advisory service, investment banking initiatives, microloans, stockbroking, assurance and asset management, plus a variety of other strategic holdings.
One of the ventures PSG spawned was Capitec Bank, which was built from the ground up focusing on the mass market. Mouton famously said he expected the venture to be a “small mistake or a big success”.
The bank has proved to be hugely successful in its target market, driven largely by maintaining the lowest banking fees in SA’s banking sector. That success is reflected in its share price, which has rocketed from 100c in 2003 to a high of R36/share over the past couple of weeks.
So it’s with interest that we note that Capitec CEO Riaan Stassen has offloaded stock worth R18,3m, representing around 16% of his stake in the bank, so far this year.
Stassen also holds options over another 1,2m shares at exercise prices ranging from 142c to R14,05/share.
The real question is what these sales by Otto and Stassen say to punters about the immediate prospects for PSG and Capitec. Mouton once told Finweek that, in his opinion, people only sell shares in the companies they manage when they believe there’s a better return elsewhere.
Mouton was a consistent buyer of PSG and Capitec last year and he certainly seems to be holding on for the time being.
Elsewhere this week, we note that Combined Motor Holdings chairman Maldwyn Zimmerman, 71, offloaded stock worth R33,2m in the motor retail group. The sale represents around 20% of his stake in the company.
We note also that the Ackerman family is still mopping up shares in the pyramid holding company that controls Pick ’n Pay, spending another R9,8m last week.
Two weeks ago we were wondering what would happen to the 5m options owned by departing Pick ’n Pay CEO Sean Summers, as the majority only mature after his official departure date at the end of this month.
Summers says that he’ll remain on at Pick ’n Pay as an employee consultant until mid-2008. We can’t help but notice that’s just long enough to allow him to exercise 90% of those options. The profit on these options at current market prices is around R130m.