Long4Life gets acquisition nod
• Investment company’s shares slide after majority of shareholders approve deal to buy sports retailer Holdsport
Shareholders of Long4Life voted overwhelmingly in favour of acquiring sports retailer Holdsport on Tuesday, sending the share price of the investment firm founded by Brian Joffe down more than 5% at one point.
Shareholders of Long4Life voted overwhelmingly in favour of acquiring sports retailer Holdsport on Tuesday, sending the share price of the investment firm founded by Brian Joffe down just over 5% at one point.
Holdsport shareholders also voted strongly in favour of the sale of the firm’s entire share capital, with the retailer’s share price unchanged. This seals the second acquisition of Long4Life since its launch in April, having picked up beauty salon franchise Sorbet in July. The Joffeled entity has also indicated interest in Gauteng-based Inhle Beverages, offering a cash and share deal in August valued to a maximum of R360m.
Long4Life’s latest bid for Holdsport was a choice between 12.1 of its shares for each Holdsport share or 11.2 shares plus R5 cash‚ the companies said in a joint statement in July. The cash offer is capped at R204m. This beat an earlier offer of swapping 10.44 Long4Life shares for each Holdsport share.
Holdsport trades as Sportsmans Warehouse and Outdoor Warehouse, with Joffe previously describing the acquisi- tion as “adding to the intrinsic value of Long4Life, as well as our overall gearing capacity, but will prove to be key in establishing and building the Long4Life investment platform in the lifestyle sector”. Holdsport also owns Performance Brands, the outdoor apparel and equipment manufacturer and wholesaler of the Second Skins and African Nature brands.
At Long4Life’s closing price of R5.84 on Tuesday, 12.1 of its shares were worth R70.66 compared with Holdsport’s R66.50. Even the revised offer faced resistance from a minority of shareholders, who claimed Long4Life had undervalued Holdsport’s shares.
Long4Life has indicated it is seeking to leverage its management experience in new acquisitions. Along with Joffe, the group appointed former Famous Brands CEO Kevin Hedderwick as chief operating officer.
Just over 89% of total shares of Long4Life voted in favour of the resolution and 93% of that of Holdsport. Just over two-thirds of the shares of both companies were represented at the scheme meeting on Tuesday.
Holdsport released unaudited results for the half-year to August on Friday, but did not declare an interim dividend.
Holdsport lifted sales 8.1%, to R872m and increased headline earnings per share 19%, to 196.4c during the period. Should the transaction proceed, Holdsport’s JSE listing would be terminated and the company would become a Long4Life subsidiary.
ACQUISITION WILL … BE KEY IN BUILDING THE LONG4LIFE INVESTMENT PLATFORM IN THE LIFESTYLE SECTOR