The shares of the diversified industrial group Barloworld were the best performing in December after a multibillion-rand bid to take the company private by a consortium led by the group’s CEO Dominic Sewela.
Shares in the industrial group were December’s best-performing stock, soaring 26.9% month on month after Sewela and Saudi Arabia’s Zahid Group announced an offer for all its shares at an 87% premium to the share price at the time. The offer values the group at R23bn.
“It represents a total value unlock at R123.10/share, comprising a cash offer to shareholders of R120/share, which will not be reduced by the R3.10/share dividend which Barloworld declared on November 22. However, UK-based Silchester International Investors, a major investor in Barloworld, has said that it does not believe the offer from the consortium is ‘compelling’,” said Marco de Matos from Anchor Capital.
Barloworld in December confirmed that the group of investors had offered to buy all its issued and shares to to be issued for cash via Newco, a special purpose vehicle.
Newco is owned by Entsha, a newly incorporated SA company that is ultimately owned by the Katlego Le Masego Trust on behalf of Sewela and his family; and Gulf Falcon Holding, a subsidiary of the Saudi Arabia-based diversified conglomerate Zahid.
Food producer Tiger Brands and technology firm Datatec were also some of the best-performing stocks on the JSE in December in what turned out to be a stellar year for the bourse.
Tiger Brands, SA’s biggest food company, has experienced a bullish turnaround over the past year, driven largely by its revamped route-to-market strategy and leadership changes.
The company in November 2023 appointed industry veteran Tjaart Kruger, marking a shift for the group.
Known for his previous successes, including leading Premier Foods’ expansion, Kruger was brought in to steer Tiger Brands through a challenging period.
The group, worth R52.2bn on the JSE in August, extended Kruger’s tenure to December 31 2028.
Tiger Brands was up 14.4% on the month under review. Telecom giant MTN also had a stellar month, up 13.9% despite its currency woes in its biggest market, Nigeria.
Financial services groups Alexforbes and Absa surged 10% and 10.1%, respectively, in the period. African Rainbow Capital Investments in October said it was reaping the rewards of pushing for a change in strategy at investee group Alexforbes, with the financial services group having returned billions to shareholders over the past few years.
The investment vehicle said it purchased its 42% stake in Alexforbes for about R3bn and has since received more than R2.5bn in dividends and returned capital, achieving an annualised return on the investment of about 30%.
The market welcomed a change in strategy from Absa after the departure of CEO Arrie Rautenbach. The bank in early December took a decision to recombine its three SA retail banking businesses into a single retail bank.
The worst-performing stock on the local bourse was mining house Sibanye-Stillwater, which was down 16.2% in the period.
Other platinum miners on the JSE also endured a torrid month, with Impala Platinum and Northam Platinum declining 14% and 13.4%, respectively.
“Last month, Sibanye said it had entered into a $500m streaming agreement with Canada-based Franco-Nevada Corporation in exchange for selling gold (mainly) and platinum streams from its Marikana, Kroondal and Rustenburg operations,” De Matos said.
“According to Sibanye, the transaction is value accretive, with the company receiving a $500m (about R8.9bn) upfront payment and a production payment of 5%-10% of the spot price per ounce, depending on whether it is the gold or platinum that is sold... The lower average price of PGMs [platinum group metals] has continued to weigh on the share prices of these counters and has negatively impacted both companies’ financial performance.”
Australian miner South32 was down 8.2% on the back of civil unrest in Mozambique which forced the group to withdraw its production guidance for the Mozal Aluminium business. The group, which has a secondary listing on the JSE, previously forecast 360,000 tonnes of aluminium output in the 2025 financial year but has walked away from this target as the unrest has affected the transport of raw materials to Mozal.
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