PSG is heading for JSE exit - but it is still preparing to list one of its businesses

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PSG Group CEO, Piet Mouton, says he expects to conclude the proposed transaction by August.
PSG Group CEO, Piet Mouton, says he expects to conclude the proposed transaction by August.
Hetty Zantman
  • The PSG Group says shareholders have responded positively to its plans to unbundled various shareholdings and delist from the JSE.
  • But as PSG prepares to leave the JSE, it will list a new business on the exchange.
  • The group did not declare a dividend for the year to end February.

The Mouton family's empire, the PSG Group, looks set to exit the JSE as planned before the end of this year. The company, which presented its annual financial results on Monday, said it received positive feedback from shareholders regarding its plans to unbundle its stakes in JSE-listed companies and exit the exchange.

In March, PSG first announced that it plans to unbundle its shareholding in PSG Konsult, Curro, Kaap Agri, CA Sales Holdings (CA&S), and Stadio. The company had already unbundled its stake in Capitec in 2021.

If it gets enough shareholder support at the upcoming general meeting in July, the PSG Group would then delist from the JSE after it wrapped up the unbundling process.

READ | 'End of an era': PSG to delist from the JSE

Mouton said Capitec had convinced shareholders regarding the value that unbundling can unlock for them.

In February 2020, PSG's share price traded at R186.60. The company then unbundled Capitec in February 2022 and shareholders received R290.41 in value of the unbundled Capitec shares. In addition, PSG shares traded at R81.83 following the unbundling.

After the proposed new transaction – which involves the unbundling of PSG stakes and PSG buying back shares from investors before delisting – investors will get R23 per share from PSG and direct stakes in PSG Konsult, Curro, Kaap Agri, Stadio and CA&S, worth R92.59.

The group will send out a circular about the unbundling scheme to shareholders in June, and they will vote on it in July. If they approve, PSG will repurchase its shares from shareholders and prepare for the delisting.

"Hopefully, by August, we can conclude on this proposed value unlock transaction," said Mouton.

But there are still many other conditions the company needs to meet. Apart from shareholder approval, PSG must also get numerous regulatory approvals from the JSE, the Takeover Regulation Panel and the Competition Commission.

New PSG-linked business coming to the JSE

As it prepares to exit the JSE, PSG will, however, list one of its businesses that's not yet on the exchange.

CA&S, a collective of fast-moving consumer goods services businesses that operate across the southern African region, will list around June.

CA&S – which owns companies like Red Bull Distribution in Zimbabwe and the African distributor for Diageo and Heineken, SMC Brands – is already listed on the Cape Town Stock Exchange and the Botswana Stock Exchange.

The company mainly distribute alcohol in major African markets. It has a footprint in eight southern African countries, including Namibia, Mozambique, Zambia and Botswana. CA&S grew its earnings from R52 million in 2014 to R272 million at the end of 2021, with headline earnings of 59.61 cents per share.

"It's maybe one of the few businesses that are actually succeeding north of Limpopo… I, myself, am quite excited to hold this share directly post the unbundling," said Mouton.

No dividend

In its results for the year to end-February, released on Monday, PSG’s net asset value per share increased 39% to R127.49. It didn’t declare a dividend. The group said its policy is to pay ad hoc dividends "as and when deemed appropriate".

"With due consideration to the PSG Group Restructuring, the directors have resolved to not declare an ad hoc dividend for the year," the company said in a statement.

PSG’s share price was flat at R96.49 following the results release.

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