Investors keen on Motsepe offering
South African investors have put African Rainbow Capital (ARC) on their radar after it said it would either offer shares to the public or create a fund to raise capital to fund ambitious expansion plans.
ARC is an investment holding company majority-owned by mining magnate Patrice Motsepe and other shareholders through Ubuntu-Botho Investments. The company has plans to conclude about 30 transactions by June, joint CEO Johan van Zyl said at the World Economic Forum in Davos on Friday.
Van Zyl was not available for comment on Monday.
“We would certainly be interested to meet management and to listen and evaluate the merits of any proposal as or when they were looking to raise capital,” said Anthony Sedgwick, a portfolio manager at Abax Investments.
Adrian Cloete, a portfolio manager at PSG Wealth, said he needed detailed information such as a prelisting circular to conduct a comprehensive valuation on ARC.
“The valuation and the pricing of the IPO [initial public offering] are key inputs into the investment process. [For the moment], investors don’t know what the price is of the IPO and also don’t have enough information to do a proper valuation of the company yet.
“As ARC is run by a very competent management team and has made some good investments, it could be something that investors could consider if the pricing at IPO is below their valuation of the company.”
ARC launched last April with four investments and a R10bn cash pile from Ubuntu-Botho under its belt.
Since then, it has closed about 11 more deals including the acquisition of interests in retirement fund administrator Alexander Forbes’ African operations, mortgage originator Ooba, stockbroker Sinayo and private-equity company Squarestone. In December, the Competition Tribunal approved ARC’s merger with investment holding company Global Asset Management.
The purchase prices in only two of ARC’s transactions were released to the public — that of Alexander Forbes and the price of a 51% interest in short-term insurance broker Indwe Risk Brokers. The value of the rest of its portfolio is unknown.