Deal makes giant single-biggest shareholder in pension administrator
Business magnate Patrice Motsepe’s investment vehicle African Rainbow Capital (ARC) this week took a major leap in its quest to become a force to be reckoned with in the financial services industry after it increased its stake in Alexander Forbes (AF), the pension administrator, to 33.9%.
This puts Motsepe in an enviable position of having his companies Ubuntu Botho and ARC being the single-biggest shareholders in both Sanlam and AF.
ARC will acquire nearly 200-million ordinary shares from AF’s current biggest shareholder Mercer for R1.013-billion, amounting to 15% of AF’s issued share capital.
Mercer will then sell the majority of its remaining stake back to AF for R1.034-billion, leaving it with a minority shareholding of less than 5%.
Both Mercer shareholder representatives will step down from the AF board.
Johan van Zyl, the co-CEO of ARC, said: “Our further investment in Alexander Forbes is in line with our stated strategy that Alexander Forbes is a key part of ARC’s financial services strategy going forward and the strategic opportunities we see. We believe real value can be unlocked for all stakeholders.”
A source with intimate knowledge of the deal said the move by ARC was a foregone conclusion as AF has done everything ARC wanted, including removing management who were not aligned with their view.
“Mercer’s exit is at a significant financial loss to them after their original investment in 2014 at 750 cents per share,”
the source said.
“This can only mean that they do not buy into the new strategy, which has seen poor and sluggish results and have determined it is best to cut their losses, despite their words in the media to try and sugar-coat this.”
Sunday World previously saw e-mail communication from Van Zyl, who is also Sanlam chairman, to the AF board in November 2017 where he demands a new strategy for AF.
Former AF CEO Andrew Darfoor was opposed to key elements that Van Zyl demanded AF implement that were at odds with Darfoor’s Ambition 2022 strategy to push AF more
into retail financial services and expand its footprint across the continent.
Darfoor’s successor Dawie de Villiers this week said it was important for AF to establish, through the ARC transaction, a committed long-term partner who understands the company’s business and is aligned to its strategy.
By Kabelo Khumalo
Motsepe’s ARC ups Alex Forbes stake
