More than 95% of shareholders voted in favour of investment holding company PSG unbundling its stakes in the listed subsidiaries it owns, and delisting.
These holdings include financial services firm PSG Konsult, private school group Curro, farming and fuel retailer Kaap Agri, distribution firm CA&S and tertiary education provider Stadio.
Investors in the Mouton family group will now hold shares in those companies directly and be paid R23 for the remaining businesses that PSG is keeping in an unlisted vehicle.
PSG, which brought many SA firms such as Capitec to market, will become a private business owned by the Moutons and senior management.
It will keep its holdings in listed agricultural firm Zeder, unlisted venture capital firm PSG Alpha, distance-learning business Optimi and retirement home developer Evergreen.
The deal described by some as a take it or leave it offer, resulted in some muttering that the R23 cash offer was too low, but judging by the vote there was overwhelming support.
When the deal was announced in March, the R23 amounted to about R114 per share, representing a 38.4% premium to the closing PSG Group share price of R82.31.
Independent valuation experts at BDO said a price range of R97.16-R109.11 a share was fair.
By Wednesday the shares in Curro, Kaap Agri, PSG Konsult were worth altogether R77.59, giving the PSG offer a value of R100.59.
The unbundling still requires regulatory approval, including that of the Competition Tribunal.
The restructuring deal comes as holding companies worldwide are under pressure to unlock the average 30% discount they trade at compared with the value of their underlying investments. Investors no longer want to pay for a pricey holding structure and an additional layer of management.
The inability of an investment holding firm to trade at its true value makes it hard to raise capital on the stock exchange, undermining the reason to remain listed.
PSG CEO Piet Mouton in 2021 hit at out at the JSE, saying there was too much red tape in staying listed and that it hobbled deal-making, with PSG sitting on a R2.6bn cash pile at the time.
The unbundling transaction will cause it to use its cash to buy out smaller shareholders.
One of the founders of PSG Group, Chris Otto, said at time of the announcement it was the end of an era for the businesses that started in 1995. “However, our goal and that of management has always been to create value for our shareholders and the continued discount situation inhibits PSG Group to achieve this.”
To unlock the discount to its underlying value, PSG first unbundled Capitec in 2020, giving shareholders direct shares in the bank and adding R21bn to their wealth, but despite the move PSG continued to trade at a 30% discount to the sum of its parts.
In a different approach to unlock the discount to its asset value, investment holding company Remgro is moving to delist companies in which it has shares, preferring mainly unlisted assets such as its fibre giant Community Investment Ventures Holding. Investors who wish to own stakes in these companies will thus need to buy Remgro shares, giving the holding company a reason to exist and hopefully increasing its share price.
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