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* PSG will distribute shares in four listed firms to unlock value
* PSG trading at over 32% discount to value of its listed assets
* Investors to get shares at 38% premium to PSG’s price
* Move will increase liquidity, bring in institutional investors
JOHANNESBURG, March 1 (Reuters) - South Africa’s PSG Group Ltd, controlled by one of the country’s richest men Johannes Mouton, plans to distribute $1.2 billion of shares in subsidiaries to shareholders, seeking to close the gap between the value of its assets and stock.
The move, which CEO Piet Mouton called the “end of an era,” sent PSG’s shares soaring around 20% on Tuesday.
It will also see the $1.2 billion investment group de-listing from the Johannesburg Stock Exchange (JSE) after more than two decades of trading.
Investors have often urged South Africa’s traditional family-owned companies, many existing since the time of the white minority rule, to simplify complex businesses that have often led to shares trading at big discounts to asset values.
PSG said the move would help to bridge a 32% discount that its shares trade to the value of its listed assets.
In 2020, PSG similarly distributed its more than 30% stake in Africa’s third biggest lender Capitec Bank to reduce the discount.
“It’s not been an easy decision to make, not for the board and not for the founding shareholders as this is the end of an era ... However, we firmly believe that the value we can unlock in terms of the transaction is the right thing to do,” Mouton said in a presentation to the investors.
As part of the plan, PSG will distribute its shareholdings in financial services firm PSG Konsult, education company Curro Holdings, agri products unit Kaap Agri and investment vehicle Stadio Holdings Ltd.
PSG shareholders are expected to get shares in the listed companies worth a total of 113.93 rand ($7.40) each, a 38.4% premium to PSG’s trading price on Friday, Mouton said.
The group will retain other investments in areas such as wealth management, investment banking and education services, as well as investments in early stage companies.
“The unbundling will also increase liquidity in the unbundled companies which will bring in huge institutional investor interest,” Allbie Cilliers, a prominent activist investor said, adding this might prompt other traditional business houses to follow suit.
