Veterans take lead

MICHAEL MARK is R45m richer. The CE of fashion house Truworths International exercised his options on 1,5m shares he was awarded for the two years ended March 2009 as part of the company’s incentive schemes. Exercisable at 791c/share, Truworths shares are currently trading at 5720c/share, giving Mark a book profit of R45m on the R43m he paid for the shares.

Truworths shares have been firmly in fashion even during the economic recession of the past two years. Mark has stewarded the company from a low of 1855c/share back in 2005 to a record high of 5977c/share early in August. He became MD of Truworths in 1991. That he’s still keeping the 1,5m shares after a cash outlay of R43m attests to his prosperity, largely borne out by his long association with Truworths.

Another CE who has a long association with his company is Phuthuma Nhleko of MTN. Nhleko has also given himself an early bonus ahead of his planned departure as head of the group next year. He took delivery of 174 000 shares before disposing of them for a cash profit of R9m. It’s not that he’d notice if that amount suddenly disappeared from his bank account. MTN has delivered nothing but riches to Nhleko and those who have stuck by it over the years.

Omnia MD Rod Humphris is one such director who has presided over massive creation for its shareholders. This time he disposed of R579 000 worth of nil paid letters of allocation in the group.

After eight years of involvement as a non-executive director of logistics company Value group, Mathews Phosa and executive director Mano Padiyachy have secured themselves a 10% stake in the company at a price of 350c/share. In a black economic empowerment transaction announced in May, Phosa’s Nine Miles Trust bought 14,6m shares through Opsiweb Investments, while Padiyachy took up 6,2m shares. Another 5% went to the company’s staff. The deal is valued at R73m. To facilitate the transaction and avoid a significant dilution to existing shareholders, Value Group implemented a voluntary repurchase offer to all shareholders at a 10c/share premium to the empowerment transaction price. Value CE Steven Gottschalk, the company’s majority shareholder, offered a total 14,8m of his shares and banked the resultant proceeds of R53,4m. “In order for the empowerment deal to pass, the majority shareholder had to support it by tendering 9,2% of his shares,” says Value finance director Clive Sack.

The company also offered to buy pro rata any shares tendered in addition to the 9,2%. Gottschalk offered 14,8m and let his stake slip below the 50,7% level he held prior to the empowerment deal. Although Value Group says 115,9m shares were tendered for the buyback, it accepted to buy back a maximum 9,2% (translating to 16,6m). Any additional shares would be bought pro rata to the offer above the 9,2% but only to the 16,6m maximum. Gottschalk’s offer made up the bulk of the buyback.