JOHANNESBURG, Jan 22 (Reuters) - South African investment company African Rainbow Capital (ARC) AILJ.J will increase its shareholding in Alexander Forbes Group Holdings Limited AFHJ.J to 33.9% after Mercer Africa pulls out, all three companies said on Wednesday.
"At the time of Mercer's strategic investment in Alexander Forbes, our relationship was at its initial stages. Since then, our commercial relationship has become well established and Mercer no longer believes it is as important to maintain an equity investment," President and CEO of Mercer Martine Ferland said.
As part of a proposed shareholder reorganisation following Mercer's decision, ARC will acquire 193 million Alexander Forbes shares, or 15%, from Mercer at a price of 525 cents per share, amounting to 1,013 billion rand ($69.71 million), the firms said in a joint statement.
Alexander Forbes said the reorganisation will neither affect nor disrupt the existing strategic alliance between Mercer, which holds 34.4%, and itself, which includes all current commercial agreements and associated service and product offerings.
ARC will also exchange shares held in Alexander Forbes Limited for shares held in Alexander Forbes Group Holdings Limited, the firms added.
After the transaction, ARC will hold 33.9% of Alexander Forbes.
"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," said Johan van Zyl, the co-CEO of ARC.
Another related transaction will see Alexander Forbes repurchasing 200.8 million of its shares, or a 15.6% stake held by Mercer, for 1.034 billion rand.
($1 = 14.3444 rand)
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.