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Iron ore mining company Assore's share price was the biggest mover on the JSE on Tuesday, with its share price closing 81.86% stronger after it announced on Monday that it would buy back the 17.4% of shares owned by minorities. The group also said it would also delist from the bourse.
The share price ended Tuesday at R314.25, and held onto its gains throughout Wednesday. Having opened at R310, by 15:00 it was trading around R310.76. The share price is still about 10% lower than the levels recorded this time last year.
Assore has been listed on the main board of the JSE since 1950, a notice to shareholders read. Its majority shareholder with a 52.4% stake is Oresteel, controlled by the Sacco family, and about 4.1% of the shares are held directly by various members of the Sacco family. Just over a quarter (26.1%) of shareholder are black economic empowerment shareholders.
According to the company, the tightly held strategic shareholding and the resulting low share liquidity deters potential institutional investors and leads to the share price being volatile.
"The board and the independent board to believe that Assore is more suited to an unlisted environment, and that its continued listing provides little benefit to the strategic shareholders," the notice read.
"The board has thus proposed that Assore use its available internal cash resources to buy back all of the issued shares other than the shares held by the remaining shareholders and subsequently delist the company from the JSE," it said.
The buy back was to cost Assore approximately R7.8 billion – at an offer price of R320, an 80% premium on Friday's closing price.
* Compiled by Lameez Omarjee
