Imperial shareholders warming up to R12.7bn cash bid by DP World
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IMPERIAL Logistics shot up 33.6 percent on the JSE yesterday after shareholders appeared to warm to a R12.7 billion cash bid by Dubai-based DP World to acquire its business.
The offer appeared to be well received among local investors, with @ MichaelJAvery commenting on Twitter that “SA counters continue to offer compelling value to foreign buyers” while @RoyTopol said: “Another good news story for South Africa: it is also an indication of the value of the shares on offer.”
A JSE analyst who did not wish to be named said a R66 offer for each Imperial share was “fair” for shareholders, especially since the share price had only been trading at more than R45 three days ago after being depressed for some time.
The analyst said that in terms of global valuations, one could not buy shares in a company with as strong a cash flow yield as at Imperial Logistics at such a low share price valuation.
The analyst, however, warned about an overly negative view of South African companies by investors.
The proposal is for Imperial to delist from the JSE post acquisition.
DP World said the deal would significantly increase its footprint in the Africa market, adding “new capabilities” and “relationships with cargo owners.” The transaction, subject to Imperial’s shareholder and other regulatory approvals, was expected to close in the fourth quarter of 2021 or in the first quarter of next year.
Imperial is the second-largest logistics-focused acquisition for DP World in almost as many days.
On Monday, the Dubai government-owned company said it wished
to acquire US-based Syncreon, a global logistics provider in the supply chains for the automotive and technology industries, for $1.2bn (R17.19bn).
DP World said the Imperial shares offer represented a premium of nearly 40 percent to the transport and mobility group.
DP World is listed on Nasdaq Dubai, and is a subsidiary of DP World Limited, a global infrastructure-led supply chain solutions provider with 136 business units in 61 countries, across six continents. It said it would use existing resources to fund the deal.
DP World Group had invested $18bn across its portfolio over 10 years to build infrastructure to support the growth in global trade. Its operations include ports and terminals, economic zones, feedering and logistics.
In Africa, it manages about 3.5 million 20-foot equivalent units of capacity in Senegal, Mozambique, Somaliland, Angola, Rwanda, Algeria and Egypt. More than $2bn of new investment was planned for new capacity in Senegal, Democratic Republic of Congo, Angola, Somaliland and Mali.
Imperial would be DP World’s most significant investment on the African continent. Shareholders holding more than 16 percent percent of Imperial’s shares had undertaken to accept the offer. Imperial had been restructuring its portfolio recently and last month said it would buy Deep Catch Namibia Holdings for about R633m, from an investment consortium led by Salt Capital. It also recently disposed of its South American shipping interests for R1.4bn.
Imperial shares closed 33.72 percent higher at R63.25 on the JSE yesterday.