End of a R10 billion era for Outsurance
The Outsurance Group has announced it will buy out the remaining minority shareholders of Outsurance Holdings Limited in a share-swap deal worth R10 billion to simplify the business.
Outsurance Holdings (OHL) is already a majority-owned subsidiary of the Outsurance Group (OGL), responsible for most of the group’s insurance and administrative operations.
In its announcement of the buyout on the Stock Exchange News Service (SENS), the group said that OHL holds the majority of assets for these functions.
OHL’s minority shareholders comprise the original founder, current executives, managers and employees,
together with their affiliates, who collectively hold 7.17% of the entire issued share capital of the subsidiary.
The intended buyback will result in this company becoming a wholly owned subsidiary of the Outsurance Group, simplifying its corporate structure.
By making the company a subsidiary, the Outsurance Group can eliminate minority-shareholder overhead and create a single shareholder level, it said.
The group said it would also ensure that the company’s management team is directly accountable to shareholders.
For OHL’s minority stakeholders, the buyout will be a share-for-share swap for interest in the group itself.
Some of Outsurance Holding’s minority shareholders include:
- Rosaceae Aequitas II, which holds 2.07% and is an associate entity of non-executive director Willem Tielman Roos
- Rosaceae Aequitas, which holds 1.05% and is also associated with Roos
- Marthinus Visser, OGL CEO and executive director, who holds 2.01%
- Daniel Matthee, OUTsurance Insurance and Life CEO, who holds 0.25%
- Bert Bakker, COO and executive director of OGL’s Australian operations, Youi, who holds 0.14%
- Erigo Capital, an associate of former OGL CFO Jan Hendrik Hofmeyr, who holds 0.11%
- Hofmeyr, who holds 0.07% directly
Since many of these shareholders also hold executive positions within the Outsurance Group, the deal is classed as a related-party transaction by the Johannesburg Stock Exchange (JSE).
The group said in its announcement that the total value of minority shareholders’ 7.17% interest in Outsurance Holdings is approximately R10.16 billion.
The remaining 92.83% stake in Outsurance Holdings is already held by the group.
Currently, the proposed buyback is subject to regulatory approval from several bodies, including the JSE and the South African Reserve Bank (SARB).
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