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Johannesburg - Blackstar Group, a London-listed, Africa-focused investment firm, has paid R470m for just over a quarter of South Africa’s Mvelaphanda Group, a month after Mvela shareholders had blocked a buyout offer.
Blackstar said in a statement it acquired 28% of black-owned investment firm Mvela for R470m ($58m). It acquired the shares from Cape Town-based asset manager Coronation Fund Managers.
As part of the deal, Blackstar CEO Andrew Bonamour and another executive will get seats on Mvela’s board, while Bonamour will also become the firm’s interim CEO.
Blackstar, which is listed on London’s AIM market for smaller companies, has been looking to further boost its presence in Africa.
Mvela, founded by prominent politician and businessman Tokyo Sexwale, has been spinning off its investments for the past two years.
Its remaining investments include a stake in South African media group Avusa. Getting a stake in Mvela would give Blackstar access to a well-known firm in South African business, and one with black ownership credentials.
South African firms are required to increase their black ownership to receive lucrative government contracts.
Mvela shareholders last month blocked a $215m cash and share buyout offer from Blackstar.
Blackstar’s CEO said in a statement it was acquiring the stake for a lower net asset value than in its failed buyout offer.
“While the proposed merger would have given us additional scale, this investment gives us similar benefits that the merger would have, albeit on a smaller scale, but at a lower cost to Blackstar,” he said.
Mvela shares were down 2.6% at R3.41, while Blackstar shares were flat in London.
Blackstar said in a statement it acquired 28% of black-owned investment firm Mvela for R470m ($58m). It acquired the shares from Cape Town-based asset manager Coronation Fund Managers.
As part of the deal, Blackstar CEO Andrew Bonamour and another executive will get seats on Mvela’s board, while Bonamour will also become the firm’s interim CEO.
Blackstar, which is listed on London’s AIM market for smaller companies, has been looking to further boost its presence in Africa.
Mvela, founded by prominent politician and businessman Tokyo Sexwale, has been spinning off its investments for the past two years.
Its remaining investments include a stake in South African media group Avusa. Getting a stake in Mvela would give Blackstar access to a well-known firm in South African business, and one with black ownership credentials.
South African firms are required to increase their black ownership to receive lucrative government contracts.
Mvela shareholders last month blocked a $215m cash and share buyout offer from Blackstar.
Blackstar’s CEO said in a statement it was acquiring the stake for a lower net asset value than in its failed buyout offer.
“While the proposed merger would have given us additional scale, this investment gives us similar benefits that the merger would have, albeit on a smaller scale, but at a lower cost to Blackstar,” he said.
Mvela shares were down 2.6% at R3.41, while Blackstar shares were flat in London.
