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| | Friday 9 July 2021 | |
| | Good morning Voornaam,
Transaction Capital is up nearly 50% this year. Considering I'm a shareholder, this makes me a happy ghost.
When a share price is running hot, companies like to use those opportunities to tap into the market and raise capital. If you're issuing new shares, it makes sense to issue them when the price is high.
Transaction Capital is executing a book build in which it plans to issue an equivalent of around 5% of existing shares. The cash will be primarily used to fund the WeBuyCars (WBC) deal, with the company taking its stake in WBC from 49.9% to 74.9%. The rest will be used for other investment opportunities within the group.
We may see the Transaction Capital share price come under pressure today, as is customary when there is a capital raise. We saw the same thing happen with Equites this week, as the property fund raised R1bn to pay for the Attacq deal and other investments in the UK.
The juicy story yesterday was Multichoice, with the media reporting that the company is in dispute with the Nigerian Federal Inland Revenue Service (FIRS). Multichoice released a SENS announcement that was light on details, simply confirming that the company is engaging with FIRS and that "operations are continuing in Nigeria" while the company hopes that the issue will be resolved.
One only needs to ask long-standing MTN shareholders about the risks of getting on the wrong side of Nigerian authorities. It's unsurprising that Multichoice closed nearly -7.4% lower.
The lead story in InceConnect this morning goes to the Imperial Logistics deal. If approved by shareholders, this transaction will see the Imperial name disappear from the JSE. The theme of JSE delistings never seems to stop.
Zeder's latest update provides an excellent opportunity to highlight some of the key omissions from the company's sum-of-the-parts valuation, which shareholders must take into account when assessing the share price.
As usual on a Friday, the team at DealMakers wraps the week up with a summary of all deal activity. Well-known personality Michael Avery discusses the funding of infrastructure projects in South Africa in the context of Regulation 28 rules for retirement funds.
Finally, in case you missed it earlier this week, one of my contributors wrote a great piece on WeWork and how the company seems to have a brighter future after a disastrous period under the previous management team. You can read that article here.
Have a relaxing weekend!
The Finance Ghost
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| | Local and Offshore Market News | |
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| | Another JSE stalwart heads for the door
Imperial Logistics is the latest company that looks set to leave the JSE. It's a win for shareholders and a loss for the market. Read More |
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| | Zeder: less of a discount than you think
Zeder's share price is 30% lower than the sum-of-the-parts valuation. However, that valuation is missing some key costs. Read More |
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| | Who's doing what this week in the South African M&A space?
Weekly summary of Merger & Acquisition activity by South African companies Read More |
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| | Who's doing what in the African M&A space?
Weekly summary of all Merger & Acquisition activity from across Africa (excluding South Africa) Read More |
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| | Thorts: What the Gatekeepers think of Reg 28 Amendments
Alternative assets are receiving consideration as suitable replacements for the long-term needs of pension funds but issues around definitions must be addressed Read More |
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| | Company Notices and Announcements | |
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| | Zeder Investments Limited >> PSG Group Limited >> | |
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