RMBH offloads short-term insurer
A little known private investment entity pays 54% premium for Glenrand MIB
INCREASING ACTIVITY ON the JSE by directors of listed companies shows they’re slowly making their way back to the markets following the year-end holidays. Whereas the past few weeks each saw only a handful of trades declared, the past week recorded 25 deals in which R57,4m changed hands. The result was net sales of R400 000.
The overall consideration was boosted by the R43m sale of RMB Holdings’ 12,3% interest in short-term insurer Glenrand MIB to Trustee Board Investments (TBI). RMB Holdings informed shareholders during its 2007/2008 financial year it no longer regarded its stake in the risk advisory and shortterm insurer a core asset and that it would therefore be disposed of.
Last week RMB Holdings reached an agreement with TBI, in which the latter agreed to buy the 36m shares at 120c/share – a 54% premium on the volume weighted average price (VWAP) in the preceding 30 trading days to 16 January. “That price was set after taking due consideration of the size of the holding being sold,” says RMB Holdings in a joint statement with TBI and Glenrand MIB CE Andrew Chislett. The statement adds it exceeds Glenrand MIB’s VWAP of 118c last year.
The statement says TBI becomes Glenrand MIB’s largest shareholder, with just over 21% of the shares (previously it owned 9% while the company’s 2008 annual report shows TBI held 7,6% or 22m shares). TBI is a 16-year-old private investment company managed by three directors (all chartered accountants). Chairman Abrie du Preez wouldn’t comment on the company’s other investments, citing confidentiality agreements with investee companies. Among its listed assets is a 1,37% shareholding in Mercantile Bank and 14,6% of Beige Holdings.
Du Preez says TBI bought into Glenrand MIB because it’s a “very good old brand” and for its good relationship with clients. “We believe it’s substantially undervalued, otherwise we wouldn’t have bought the shares,” Du Preez commented on the premium TBI paid for the 36m shares. TBI says it focuses on long-term investments in undervalued companies and its 50 shareholders and the directors “have specific experience in shortterm insurance and business development in the financial services industries”. The company says it has realised compound annual return on investment of 32,3% since 1992.
The deal happened after Glenrand MIB completed its restructuring into a risk advisory business with its core interests in short-term insurance broking and policy administration.
A large portion of the remaining R14m worth of deals last week came from some of microlender African Bank Investments Limited’s (Abil) directors, who invested a collective R4,6m in the company’s second black economic empowerment programme. The Masonge offer closed in November 2008 with 12 800 applications for the heavily discounted shares worth R74m in Masonge Investment Holdings (which will be converted on a one-for-one basis to Abil at the end of the investment period in 2015). “Masonge has utilised the proceeds from the public offer and purchased a total of 2,4m Abil shares through the market at an average price of 2625c/share,” says Abil in a statement.
Executive director Tami Sokutu led three non-executive colleagues with a R2m investment (at the Abil employee price of 364c/ share), followed closely by Mutle Mogase