Merger and acquisition activity across South African industries slumped to 5.4 billion rand ($366 million) in 2018, the lowest level in 15 years, with deal flow over the past few years mainly concentrated in local companies expanding their operations in countries such as the U.K., Australia and India.<\/p>\n
At the moment, FirstRand is an outperformer. It is the most profitable of its three biggest peers, Standard Bank, Absa and Nedbank, while its shares have also outperformed its rivals over the past five years, according to data compiled by Bloomberg. Although at a price to book ratio of 2.7 times, it is also the most expensive relative to its peers.<\/p>\n
No deal is currently in the pipeline regarding FirstRand, said RMH Chief Executive Officer Herman Bosman.<\/p>\n While there is a \u201ccontrol premium at RMH level if somebody wanted to buy control of FirstRand,\u201d he said, \u201cwe don\u2019t think that\u2019s on the cards, at all.\u201d<\/p>\n Being bundled out of RMH will end a chapter in the life of the bank, which has its roots in a small startup founded in Johannesburg\u2019s central business district in 1977.<\/p>\n As holding firms, companies like RMH and Remgro trade at a discount to the value of their underlying investments, which is spurring the spinoff. Remgro owns 28% of RMH and 3.9% in FirstRand, while RMH owns 34% of FirstRand.<\/p>\n \u201cIf this transaction goes through as we planned, it will be the end of a prolific era in South African corporate history,\u201d Bosman said. \u201cBut it\u2019s not the only factor to consider. We are unlocking 15 billion rand to shareholders, that\u2019s significant.\u201d<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2019\/11\/Firstrand.jpg\")
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