Anchor Group plans to delist from the JSE

JSE-listed Anchor Group is the latest company to announce plans to delist from the exchange.

The investment firm, which was founded in 2012, and listed in September 2014, is making a R4.25 per share offer to shareholders and now has R64.9 billion in assets under management. If accepted, it will amount to a R900 million offer and see it delist in 2021.

Read Anchor’s full Sens statement

Anchor Group says this offer represents an 11% premium to the 30-day volume weighted average price over the 30 business days preceding the announcement.

“This is an exciting next step in the evolution of our group. We have built critical mass, with over 15 000 clients and over R65 billion of assets under management and administration, and we believe we will better service our clients in the long term as an unlisted entity,” says Anchor Group CEO and founder Peter Armitage.

This move by Anchor Group comes weeks after industrial group Afrox said it also planned to leave the JSE.

Read the Afrox Sens announcement

The number of companies leaving the exchange has driven concerns that the JSE is losing its stature as a preferred place for companies to source capital.

Armitage echos this view.

He says the SA-listed equity market has been very difficult for the last few years. Since the cost of funding is now the cheapest in decades, it made sense for the company to propose buying out shareholders – who wish to sell – at a premium to the listed price.

“We believe the SA market, particularly in the smaller company space, is not likely to attribute high earnings multiples to companies for some time to come. This has led to a number of delistings in SA, including the asset management space.”

Given this outlook, it wants to put in place a different corporate structure, which will be more appropriate, “enabling management to focus on achieving its clients’ investment objectives.”

The proposed new structure will see the company having three core shareholder groupings – Management, Masimong and Capricorn Capital Partners. None of these parties will control Anchor Group.

It says this new structure along with the proposed delisting will help achieve its objectives of facilitating it becoming 51%-black-owned and increasing management’s stake.

It has access to R450 million to facilitate the delisting. The group will be funding this, along with support from lender RMB, up to a maximum of R250 million.

Its management, Masimong and Capricorn have provided an undertaking to take up any further equity required to buy out additional existing shareholders who elect to sell.

Listen: Sasfin’s David Shapiro looks at what’s behind a company’s choice to delist, with Nompu Siziba