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TheSPECtacle NOTES soon-to-be-secondarily listed private equity specialist Blackstar has the knack of exiting investments very profitably. Finweek has previously recorded Blackstar’s almost R150m “turn” made on DCD-Dorbyl – a transaction that netted a rather nifty return on investment of 2,8 times money over a 20-month holding period.
Naturally, TheSPECtacle’s beady eye has fallen on Blackstar’s already very profitable investment in Litha Healthcare Group [JSE:LHG] – which not too long ago looked uninspiring in its former guise as Myriad Medical. While Blackstar has already made the easy money, TheSPECtacle suspects there won’t be any immediate plans to exit Litha – certainly not while its promising vaccine plant in Cape Town is still coming on stream and there are opportunities for bolt-on acquisitions.
Of course, investor demand for quality healthcare counters (and there are only a handful of such listings on the JSE) could force Blackstar to apply its mind to an exit strategy sooner rather than later. As an exit for Blackstar, unbundling would be an obvious option; or perhaps placing the shares with institutional investors.
However, TheSPECtacle reckons Litha might well slot comfortably into the ample flanks of pharmaceutical giant Adcock Ingram (which could use some inspired corporate action to spur sentiment).
Another one bites the crust
THERE PROBABLY won’t be too many eyelids batted at the news cellular services specialist Vox is proposing to buy out shareholders and delist. Talk of a delisting at this former market darling has been in the market for the best part of two years.
Perhaps a few stubborn shareholders (who can opt to stay on board an unlisted vehicle) will argue the toss about price, but there really shouldn’t be too many quibbles.
However, the Vox proposal does serve to remind us small caps are in a particularly fragile space. With sentiment brittle it’s understandable companies would be keen to go private. It’s just a pity it’s usually the really good ones that go first, even if there’s a fair chance the company – in somewhat altered state – may return to the market in better times.
The Vox proposals come hard on the heels of a delisting consideration at Universal Industries, another promising small cap contender. Frankly, it’s starting to be difficult to look at a cautionary notice from a small cap company and not immediately think of the “D” word.
A classic break-up?
SO BUILDING SUPPLIES conglomerate Illiad Africa [JSE:ILA] plans to realign a portion of its (sprawling) portfolio. TheSPECtacle has always regarded the carefully crafted Iliad empire as a private equity player’s dream – especially in current trading conditions.
However, realignment sounds awfully mundane – especially since that effort will be detrimental to earnings over the short term. Still, TheSPECtacle is rather anxious to see what portion of the portfolio is realigned and what that “realignment’ actually involves. Who knows what Iliad may have started…
Is now the time?
OUR DIRECTORS’ DEALINGS table this week (see page 41) shows some noteworthy buys by top directors at empowerment company Sekunjalo Investments [JSE:SKJ] – not only for the confidence shown in the empowerment company but also for mopping up the potential overhang in shares inherited by Absa after the single stock futures debacle.
But it was the tail-end of Sekunjalo’s Sens announcement that prompted a double-take from TheSPECtacle. Tucked away in the last paragraph is mention of a 6% stake secured in Sekunjalo by a company called Miramare Investments. There’s wasn’t much TheSPECtacle could dig up about Miramare – except the mystery investor appears to have also snapped up a goodly portion of the Absa “default” shares.
It’s all very interesting. With Survé owning more than 40% of Sekunjalo, Abdullah (and staff) around 10%, Absa retaining a 10% strategic stake and Miramare holding 6%, it would appear roughly two-thirds of the empowerment group’s issued shares are spoken for.
That might be significant for the share price – especially if strong second-half trading this financial year spurs demand for Sekunjalo scrip (currently discounting intrinsic NAV by around 30%).
TheSPECtacle NOTES soon-to-be-secondarily listed private equity specialist Blackstar has the knack of exiting investments very profitably. Finweek has previously recorded Blackstar’s almost R150m “turn” made on DCD-Dorbyl – a transaction that netted a rather nifty return on investment of 2,8 times money over a 20-month holding period.
Naturally, TheSPECtacle’s beady eye has fallen on Blackstar’s already very profitable investment in Litha Healthcare Group [JSE:LHG] – which not too long ago looked uninspiring in its former guise as Myriad Medical. While Blackstar has already made the easy money, TheSPECtacle suspects there won’t be any immediate plans to exit Litha – certainly not while its promising vaccine plant in Cape Town is still coming on stream and there are opportunities for bolt-on acquisitions.
Of course, investor demand for quality healthcare counters (and there are only a handful of such listings on the JSE) could force Blackstar to apply its mind to an exit strategy sooner rather than later. As an exit for Blackstar, unbundling would be an obvious option; or perhaps placing the shares with institutional investors.
However, TheSPECtacle reckons Litha might well slot comfortably into the ample flanks of pharmaceutical giant Adcock Ingram (which could use some inspired corporate action to spur sentiment).
Another one bites the crust
THERE PROBABLY won’t be too many eyelids batted at the news cellular services specialist Vox is proposing to buy out shareholders and delist. Talk of a delisting at this former market darling has been in the market for the best part of two years.
Perhaps a few stubborn shareholders (who can opt to stay on board an unlisted vehicle) will argue the toss about price, but there really shouldn’t be too many quibbles.
However, the Vox proposal does serve to remind us small caps are in a particularly fragile space. With sentiment brittle it’s understandable companies would be keen to go private. It’s just a pity it’s usually the really good ones that go first, even if there’s a fair chance the company – in somewhat altered state – may return to the market in better times.
The Vox proposals come hard on the heels of a delisting consideration at Universal Industries, another promising small cap contender. Frankly, it’s starting to be difficult to look at a cautionary notice from a small cap company and not immediately think of the “D” word.
A classic break-up?
SO BUILDING SUPPLIES conglomerate Illiad Africa [JSE:ILA] plans to realign a portion of its (sprawling) portfolio. TheSPECtacle has always regarded the carefully crafted Iliad empire as a private equity player’s dream – especially in current trading conditions.
However, realignment sounds awfully mundane – especially since that effort will be detrimental to earnings over the short term. Still, TheSPECtacle is rather anxious to see what portion of the portfolio is realigned and what that “realignment’ actually involves. Who knows what Iliad may have started…
Is now the time?
OUR DIRECTORS’ DEALINGS table this week (see page 41) shows some noteworthy buys by top directors at empowerment company Sekunjalo Investments [JSE:SKJ] – not only for the confidence shown in the empowerment company but also for mopping up the potential overhang in shares inherited by Absa after the single stock futures debacle.
But it was the tail-end of Sekunjalo’s Sens announcement that prompted a double-take from TheSPECtacle. Tucked away in the last paragraph is mention of a 6% stake secured in Sekunjalo by a company called Miramare Investments. There’s wasn’t much TheSPECtacle could dig up about Miramare – except the mystery investor appears to have also snapped up a goodly portion of the Absa “default” shares.
It’s all very interesting. With Survé owning more than 40% of Sekunjalo, Abdullah (and staff) around 10%, Absa retaining a 10% strategic stake and Miramare holding 6%, it would appear roughly two-thirds of the empowerment group’s issued shares are spoken for.
That might be significant for the share price – especially if strong second-half trading this financial year spurs demand for Sekunjalo scrip (currently discounting intrinsic NAV by around 30%).
