JOHANNESBURG, Jan 22 (Reuters) - South African investment company African Rainbow Capital (ARC) will increase its shareholding in Alexander Forbes Group Holdings Limited to 33.9% after Mercer Africa pulls out, all three companies said on Wednesday.
“At the time of Mercer’s strategic investment in Alexander Forbes, our relationship was at its initial stages. Since then, our commercial relationship has become well established and Mercer no longer believes it is as important to maintain an equity investment,” President and CEO of Mercer Martine Ferland said.
As part of a proposed shareholder reorganisation following Mercer’s decision, ARC will acquire 193 million Alexander Forbes shares, or 15%, from Mercer at a price of 525 cents per share, amounting to 1,013 billion rand ($69.71 million), the firms said in a joint statement.
Alexander Forbes said the reorganisation will neither affect nor disrupt the existing strategic alliance between Mercer, which holds 34.4%, and itself, which includes all current commercial agreements and associated service and product offerings.
ARC will also exchange shares held in Alexander Forbes Limited for shares held in Alexander Forbes Group Holdings Limited, the firms added.
After the transaction, ARC will hold 33.9% of Alexander Forbes.
“Our further investment in Alexander Forbes is in line with our stated strategy that Alexander Forbes is a key part of ARC’s financial services strategy going forward and the strategic opportunities we see. We believe real value can be unlocked for all stakeholders,” said Johan van Zyl, the co-CEO of ARC.
Another related transaction will see Alexander Forbes repurchasing 200.8 million of its shares, or a 15.6% stake held by Mercer, for 1.034 billion rand. ($1 = 14.3444 rand) (Reporting by Nqobile Dludla; editing by Nick Macfie)