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Johannesburg - Banking group FirstRand has said it will continue to cultivate an owner-manager culture, after senior executives pledged to buy a huge amount of shares from FirstRand and RMB Holdings (RMBH) founding members.
It announced on Wednesday that senior executives have agreed, in a private transaction, to purchase FirstRand and RMBH ordinary shares from founders GT Ferreira, Laurie Dippenaar and Paul Harris in a transaction valued at R398m.
FirstRand was created in April 1998 through the merger of the financial service interests of Anglo American and RMBH. It has long been touted as the most entrepreneurial of the so-called big four banks, due to its leadership retaining high ownership levels.
Directors to participate in the transaction are FirstRand CEO Sizwe Nxasana, financial director JP Burger and RMBH chief operating officer Peter Cooper.
They will buy the shares at prices of 2 684 cents per share for RMBH and 1 606c/share for FirstRand, representing a 12% discount on the present share price of FirstRand and a 7.7% discount on that of RMBH.
Creating the next generation
FirstRand said prices were based on the 30-day moving average of the respective shares in October, when discussions were initiated.
Analyst at Independent Securities Simon Fillmore said the deals will be positive for the group, as it indicated the level at which executives were prepared to buy into the two companies' shares.
"It is a passing of the baton from the old guard to the new," he said.
"Much of the success of FirstRand and RMBH since inception can be attributed to the 'owner-manager' culture that has been embedded throughout the group over many years," said Dippenaar.
"This culture has been critical to the spirit of innovation and entrepreneurism that has differentiated the businesses from peers."
He added the transference of ownership goes some way towards creating the next generation of owner-managers to take the firms forward, and ensures that management and shareholders' interests continue to be closely aligned.
- Fin24.com
