RMH shares drop as FirstRand unbundles
RMH, an investment holding company, yesterday unbundled its 34 percent stake in the financial services group FirstRand.
The FirstRand shares will be distributed to shareholders in the ratio of 1.31189 FirstRand shares for every RMH share held as at Tuesday.
This comes after RMH shareholders gave the restructuring a thumbs-up at the beginning of June, with a 100percent majority vote, ending a 27-year-old relationship between the two financial institutions and to reduce the discount to its underlying assets.
The end of an era led to a decline in RMH’s share price to R2.06 a share in the afternoon, down from Tuesday’s closing price of R51.04.
RMH closed 96.67 percent lower at R1.70 yesterday.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said the drop in RMH’s share price was expected following the unbundling of FirstRand.
“RMH’s only material asset was FirstRand. There was also holding in a property company, but that was insignificant in the scheme of things. Investors held it for the FirstRand stake,” Nair said. The unbundling of the FirstRand stake, which owns a portfolio of financial services franchises such as First National Bank (FNB), RMB, WesBank, Aldermore and Ashburton Investments, will leave RMH with its property portfolio.
Its RMH Property has a 27.5percent stake in Atterbury and a 37.5percent stake in Atterbury Europe in its core property portfolio. RMH also has stakes in Diversity and Integer Properties.
RMH first announced the unbundling in November and said the move would unlock about R5.41billion in value for its shareholders. RMH was the largest shareholder in FirstRand.