Thursday 17 June 2021
Good morning Voornaam,
As the Naspers-Prosus fight rages on between management and the activist shareholders, the EdTech divisional leaders in Prosus are keeping their heads down and doing deals. In the past couple of weeks, Prosus has announced nearly R30bn in deals in that space.
That's more than the market cap of Santam, yet it goes largely unnoticed because these acquisitions are dwarfed by the discount to NAV caused by the inefficient structure. When the market is angry about a >R1tn problem (yes, trillion!) then trying to distract them with a R30bn story won't work.
Prosus is mopping up businesses in growth industries, which is what investors like to see in a company like this. It makes the stubbornness of management even more peculiar, as Prosus certainly has the ability to grow into a major global player with shareholder support.
The lead story this morning is a strong set of numbers and a R500m investment commitment from Mpact, the paper and plastics packaging company that clearly sees plenty of opportunity in South Africa. With significant renewables projects in the pipeline alongside the development of new facilities, it demonstrates the value of allowing businesses to put steps in place to move operations off-grid.
The property sector features strongly in InceConnect once more, with important updates on the Arrowhead-Fairvest merger as well as a neat capital raise by Irongate Group, the rebranded Investec Australia Property Fund.
Bell Equipment released a trading statement that was incredibly light on details. That's not surprising when the company is the subject of shareholder activism regarding a pending buyout offer by IA Bell as the controlling shareholder.
If you plug in your headphones, you'll find that the final piece today is a video from Black Onyx with insights into s12J investments. Keep those headphones in for a three minute update on Naspers-Prosus as well as the SAB Zenzele Kabili share price vs. NAV situation in the market, courtesy of my LM Radio / Magic 828 segment.
Make sure you aren't falling behind on Magic Markets episodes, with Episode 30 launching soon. Episode 29 covered the critical agriculture sector in South Africa. Wandile Sihlobo, a true expert in this space, joined us to discuss this industry.
There are numerous companies on the market with direct agri exposure and several with indirect exposure, like Mpact which makes money from the citrus crop that needs fruit cartons.
With that, I wish you a fruitful Thursday (sorry).
The Finance Ghost
Local and Offshore Market News
Mpactful investment in South Africa
Mpact has released a strong earnings update and confirmed that R500m has been earmarked for further investment in South Africa. Read More
Arrowhead will work together with Fairvest
Arrowhead's independent board has assessed Fairvest's approach and determined that the firms should work together to propose a merger. Read More
Irongate raises A$50m on the JSE
The Investec Australia Property Fund rebranded to Irongate Group in late 2020 and has successfully tapped the market for capital. Read More
Bell Equipment: a company of few words
Bell's profitability seems to be recovering quickly, which activist shareholders will be watching with interest. Read More
s12J: write off 100% of your investment against taxable income
Section 12J is an investment tax incentive designed to encourage investment into a range of private companies which meet defined criteria. Read More

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