Group Five soars on offer
42% JUMP: COMPANY SAYS GREENBAY BID UNDERVALUES BUSINESSES
Revised group strategy to be finalised.
Ailing construction group Group Five has been given until Friday to accept or reject an offer for the sale of its European tolling business. The group’s share price jumped more than 42% in early trade on Monday to R13.15 per share after closing at R9.21 on Friday. Its share price has dropped by 62.5% in the year to date.
The group stated that the offer from JSE-listed Greenbay Properties undervalues the business that is, according to Group Five, “a fundamental portion of Group Five’s portfolio”.
The offer is for Group Five’s three European assets, namely its stakes in European concessions, assets in Bulgaria and Intertoll Europe’s operation and maintenance contracts.
These businesses are the foundation of Group Five’s annuity income that has played a role over many years in mitigating the volatility of its construction business.
In its latest annual report Group Five states: “as a specialist, Intertoll Europe is growing its position in motorway development, investment and operations group based in Europe.”
The sudden departure of its former CEO Eric Vemer in February, and several top executives thereafter, was followed by a bruising boardroom battle with Allan Gray asserting itself as shareholder representative.
The group now has a new board and Themba Mosai has been appointed as CEO.
The group is working on a new corporate strategy that was approved by the board on October 4 and is expected to be finalised by the end of the month.
Earlier this year Group Five sold a 49.9% stake in Intertoll Europe’s underlying PPP project investment portfolio to Aberdeen Infrastructure Funds (AIF), the infrastructure investment unit of the R5.2 trillion Aberdeen Asset Management Plc. Group Five says this move “will enable Group Five to source and participate in further attractive global concession assets, alongside AIF, with the potential to procure new operations and maintenance roles for the group, without having to solely invest large amounts of capital.”
In its SENS announcement Group Five on Monday said it has appointed an independent board to consider the offer and will appoint an independent expert to provide a fair and reasonable opinion in relation to the offer.
Greenbay is not the only party interested in Group Five. The group on October 6 confirmed that it “has received a number of expressions of interest from credible parties, and continues to receive new expressions of interest. These relate to various assets and businesses within the group”.