In a landmark deal that coincides with the final steps in the departure of FirstRand’s three founders, its parent company RMB Holdings said on Tuesday it would be distributing its R130bn shareholding in the banking group to shareholders.
Concurrently, Johann Rupert’s investment holding company Remgro also notified the market after trading closed that it intends to distribute its 28% stake in RMB Holdings to shareholders. RMB Holdings has a 34.1% stake in FirstRand.
According to one analyst, this represents an enormous shift by the companies indirectly controlled by Rupert.
“It’s a massive move and they deserve to be commended. It will unlock enormous value because both RMB Holdings and Remgro trade at a discount to the sum of their investments. It’s also extremely brave as, in some ways, Remgro is opting to distribute its crown jewels,” said Opportune Investments CEO Chris Logan.
The decision coincides with the departure of FirstRand’s driving force in GT Ferreira, Laurie Dippenaar and Paul Harris, all of whom have stepped away from the active running of the business over the past few years.
“They contributed huge value,” said Logan. “So the decision by Remgro to unbundle its shareholding could be interpreted as a sign they want to get behind a new wave of entrepreneurs.”
Sasfin Securities deputy chair David Shapiro said it was “just unwinding an unwieldy holding structure that should never have been there in the first place”.
With investment-holding companies all trading at large discounts, the move could signal Rupert is taking the lead in unlocking value, and shareholders may ask the likes of the Mouton family’s investment-holding company PSG to do the same with its stake in Capitec.
RMB Holdings trades at a 10% discount to its portfolio, which includes FirstRand and a smaller basket of property investments. Remgro trades at a much bigger discount of 25% to its portfolio.
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