JOHANNESBURG – The continent's biggest bourse, the JSE, is spreading its wings with the acquisition of a majority stake in Link Market Services South Africa.
The JSE announced yesterday that it would buy a 74.85 percent stake in Link SA for R224 million from Link Market Services Limited, a company incorporated in Australia. The JSE said Link SA’s black economic empowerment (BEE) partner would retain its 25.15 percent stake in the company.
It said Link SA’s chief executive, Iqbal Haniff, would retain his position and the company would retain its level 2 BEE rating post the transaction.
“The proposed transaction supports the JSE’s strategy to strengthen its relationships with its issuers and to grow sustainably across the issuer services value chain,” the JSE said.
Link SA is the second largest share register business in South Africa and has a client base that includes six of the top 40 issuers.
The bourse said the transaction would be revenue accretive with an expected contribution of about 6 percent exceeding its return on investment hurdles.
Avior Capital Markets analyst David Talpert said the move by the JSE was a positive one, as it would allow it to diversify its revenue away from share trading.
“This will diversify the JSE’s revenue generation, because trading activity can be volatile, so a different revenue source will bring increased earnings stability,” he said.
The Link Market Services group delivers integrated capital market, registry and related services to international companies listed on multiple exchanges
It manages and maintains the registers of more than 2 000 issuers, representing more than 30 million shareholders.
In Australia and New Zealand alone, the group administers more than 7 million shareholders on the registers of more than 1800 securities, including many of the region’s largest companies, together with unit registers of more than 250 funds managed by some of the world’s largest investment institutions.
The JSE said the transaction was expected to be finalised by the end of the year, subject to the required approvals being obtained.
BUSINESS REPORT