Just as PKI launched its shiny new voluntary offer for MAS, one of my albatrosses flew by with a morsel that stinks to high heaven.
I have now read the 18-page summary of the MAS-Prime Kapital development joint venture (DJV) agreement, the one PKI keeps pointing to as proof that “all material terms and conditions are publicly available”. But a summary is not a contract, and this one comes wrapped in enough disclaimers to make even the bravest lawyer squirm.
Webber Wentzel, the law firm tasked with compiling the document, says it relied solely on documents provided by MAS, conducted no independent verification, and assumes — yes, assumes — the contracts are accurate, enforceable and authorised.
Now we know more: in 2020 the DJV agreement was amended to allow it to purchase MAS shares, a significant shift in mandate. At that point Martin Slabbert was CEO of MAS, and Victor Semionov the CFO, while both were also major partners in Prime Kapital. In other words, the same people sat on both sides of the table, PKI as the buyer and MAS as the funder.
We don’t know what approval processes were followed. The documents don’t say. But if Slabbert and Semionov were conflicted (and by any sane definition they were) who approved the change? Who decided it was appropriate to let the DJV, funded by MAS shareholders, quietly acquire MAS equity? And where was the board?
Even more troubling, this change wasn’t disclosed to shareholders until March 2025, five years after the fact and long after PKI had built its stake. A 2022 circular seeking approval for further funding into the DJV made no mention of this mechanism. To his credit, Slabbert recused himself from the negotiations. But he was still a director of the board that issued the circular. Only the most naive would believe that responsibility vanishes when you step out of the room.
Now, with Hyprop out of the race, PKI has launched a formal, unconditional voluntary offer to acquire all shares in MAS Plc not already under its control. The bid, announced via Sens on Monday morning, offers shareholders a choice: cash at €1.40 per share (a 50% premium to the pre-offer price), a mix of cash and preference shares, or pure preference share instruments — either listed or unlisted.
But if MAS is so undervalued, why not buy the whole thing? Why limit the cash to just €110m, enough to secure a sliver more than 10%? Why not go all in? Because this isn’t about value. It’s about control. The headline price and structure give the appearance of optionality and fairness. But for many minority shareholders the core issues remain unchanged: governance opacity, limited disclosure on the DJV, and growing unease about who truly controls MAS.
PKI wants just enough to cross 50%, after which it says it will stop acquiring shares. It says it doesn’t want to delist MAS. It says the DJV will be wound down by 2035. But once over the threshold it no longer needs consent to shape the board, steer capital and call the shots.
MAS becomes a vehicle for Prime Kapital’s ambitions and minorities, again, are left riding shotgun, with no map, no questions answered, and no view of the road ahead.
That’s what’s at stake here. And if you’re wondering where the JSE stands in all this, take a look at clause 5.3 of the circular: any undertakings by PKI are valid only if they don’t breach the rules of any applicable exchange. It’s a clear legal hedge. But it’s also an unintentional confession that the JSE has no real jurisdiction over Prime Kapital, and limited leverage over MAS.
In other words, SA investors are watching a takeover unfold on the JSE’s platform that the JSE is powerless to control. Could the Reserve Bank or Financial Sector Conduct Authority step in? Possibly. The preference shares being offered are subject to Bank approval, and regulators may have more appetite to interrogate whether these instruments are simply equity control in a different form.
But the real question is why investors should support a bid led by individuals who oversaw nondisclosure of key funding mechanisms, approved changes to contracts while sitting on both sides of the transaction, and only revealed development margins when the pressure became unbearable.
An albatross put it best: “If we can’t trust the people behind the structure, how can we trust the structure?”
Doing the right thing the wrong way
Whatever the obvious merits of a lower inflation target — and they are real — doing the right thing the wrong way can often be as disastrous as doing the wrong thing outright.
The Bank’s move to anchor expectations at 3% may be intellectually sound and market-pleasing, but it’s fast becoming a textbook case in how not to implement policy reform. A unilateral announcement, made without the Treasury’s consent or cabinet backing, has now triggered what amounts to a low-grade war between the two anchors of macroeconomic policy.
It’s hard not to feel like the Bank and Treasury have become that bickering couple who pretend everything’s fine at the braai while throwing daggers at each other over the potato salad.
Finance minister Enoch Godongwana responded with unambiguous irritation: the inflation target is his to set, in consultation with the president and the cabinet, not the Bank’s to claim by press conference. The standoff now risks eroding confidence just when we can least afford it.
SA will be lucky to grow 1% this year, before the fallout from the US import tariffs begins to kick in. The Bank’s own modelling concedes that moving to 3% will extract a further short-term growth cost. So what are we left with? Tight money, tighter politics, and precious little fiscal space to manoeuvre.
The better path? The Treasury and Bank should sit down together to forge a new, credible macro framework that balances low inflation with faster economic growth, and do so with one voice. Instead, we have signs of hubris setting in at the black tower, as this looks like mandate overreach.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at michael@fmr.co.za.
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