African Rainbow Capital (ARC) will increase its stake in Alexander Forbes, becoming the group’s largest shareholder.
Mercer Africa, which owns a 34% stake, will dispose of its entire investment of 442.8 million shares in Alexander Forbes Group Holdings.
ARC, the investment holding company owned by Billionaire Patrice Motsepe, will acquire 193 million ordinary shares from Mercer for of R1.013 billion, which amounts to 15% of Alexander Forbes’s issued share capital.
It has also proposed a ‘Specific Repurchase’ of around 200 million Alexander Forbes shares which amount to 15.6%, held by Mercer, for R1.034 billion.
ARC will hold 33.9% of Alexander Forbes issued share capital, following the deal.
“Our further investment in Alexander Forbes is in line with our stated strategy that Alexander Forbes is a key part of ARC’s financial services strategy going forward and the strategic opportunities we see.
“We believe real value can be unlocked for all stakeholders,” said Johan van Zyl, the co-CEO of ARC.
Alexander Forbes says the reorganisation will neither affect nor disrupt the existing strategic alliance between Mercer and Alexander Forbes, which includes all current commercial agreements and associated service and product offerings.
From an investments perspective, the partnership with Mercer will continue to allow Alexander Forbes clients access to financial strategies and leading global asset managers, including a portfolio of integrated solutions driven by exceptional intellectual capital.
Alexander Forbes chief executive officer Dawie de Villiers, says it was important for the company to establish, through this transaction, a committed long-term partner who understands the company’s business and is aligned to its strategy.