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Johannesburg - The Yakani Group has taken a 51% stake in AltX listed brick maker African Brick Centre for R44.6m.
The transaction comes ahead of African Brick's interim financial results, which are expected in the next two weeks. The company expects headline earnings per share will be significantly lower than the previous reporting period.
Yakani Infraco, the infrastructure division of the Yakani Group, has made an offer to acquire the shares in the listed brick maker for 28c per share.
Yakani Group CEO Hugo Knoetze has described the transaction as "an attractive buy", while group chairperson Sizwe Tati believes that market conditions served as an ideal opportunity to buy shares in listed assets.
Tati said: "In our opinion, no other sector offers the same potential for investor returns as the infrastructure sector."
According to Tati, the South African infrastructure sector is likely to remain buoyant after the 2010 Fifa World Cup. He cited strong government infrastructural spending as well as opportunities in the brewery, dealership and shopping mall space.
Premium offering
The price offered for African Brick places a 22% premium on the 23c that the share is currently trading at, following the announcement of the deal.
This figure remains significantly below the 46.6c net asset value (NAV) reported by African Brick Centre when it released its financial results for the 12 months ended February 2008.
Knoetze said that the controlling stake was part of the thinking behind offering the premium for the company.
In August, African Brick warned investors that its earnings for the six months to end-August would be significantly lower than in the previous corresponding period. For the full year to end-February, the company earned 10.9c per share of which 4.4c was earned in the period to August 31 2007.
Knoetze has confirmed that the unlisted Yakani Group has about R1bn worth of assets under its control and around R300m in cash resources. These assets are split between infrastructure, mining, property and industrial businesses.
Reverse listing?
He has indicated that African Brick Centre will (subject to regulatory approval of the deal), be 're-launched in 2009.This re-launch will include combining the Yakani infrastructure assets into African Brick.
Yakani owns its own brick manufacturing businesses as well as a roofing solutions business and a paint manufacturing company.
Ahead of the cautionary announcement in August, African Brick CEO Beno van Graan was a buyer of the company shares.
Van Graan bought R736 000 worth of company shares at between 24c and 25c.
Trade in African Brick was brisk on Thursday, when the deal was concluded, with 592 000 shares trading hands at between 16c and 20c a share.
This was followed up on Friday with over 1m shares trading at between 19c and 20c a share.
- Fin24.com
