DON’T GET EX­CITED ABOUT UN­BUNDLINGS

Finweek English Edition - - SIMON SAYS -

I al­ways cau­tion against shares that get un­bun­dled from listed com­pa­nies. Ex­am­ples in­clude Rem­gro pass­ing Tran­shex and Im­plats onto poor share­hold­ers, and more re­cently HCI un­bundling its stake in Mon­tauk. Soon we’ll have Glen­core ditch­ing its hold­ing in Lon­min. The re­cent Mon­tauk re­sults show why HCI didn’t want it and this is nearly al­ways the is­sue. The com­pany un­bundling the shares ob­vi­ously doesn’t want them and is un­able to sell them, so it just passes them on via an un­bundling. Sure, we’ve had some bet­ter un­bundlings – Spar is the only one that re­ally comes to mind, and that was over a decade ago. As a share­holder in any of the com­pa­nies propos­ing un­bundlings, I will al­ways sell the shares as soon as pos­si­ble. Of course, the process of sell­ing of­ten isn’t so sim­ple as small share­hold­ers may get a small par­cel of shares that is sim­ply not eco­nom­i­cal to sell when costs are taken into ac­count.

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