The FirstRand shares will be distributed to shareholders in the ratio of 1.31189 FirstRand shares for every RMH share held as at Tuesday. RMH, an investment holding company, today unbundled its 34 percent stake in the financial services group FirstRand.   Photo: Simphiwe Mbokazi/African News Agency(ANA).
The FirstRand shares will be distributed to shareholders in the ratio of 1.31189 FirstRand shares for every RMH share held as at Tuesday. RMH, an investment holding company, today unbundled its 34 percent stake in the financial services group FirstRand. Photo: Simphiwe Mbokazi/African News Agency(ANA).

RMH's share price plunges in line with unbundling

By Sandile Mchunu Time of article published Jun 24, 2020

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JOHANNESBURG - RMB Holdings (RMH) share price earlier today declined by more than 97 percent on the JSE in line with the market expectations, according to an industry analyst. 

The FirstRand shares will be distributed to shareholders in the ratio of 1.31189 FirstRand shares for every RMH share held as at Tuesday. RMH, an investment holding company, today unbundled its 34 percent stake in the financial services group FirstRand. 

This comes after RMH shareholders gave the restructuring a thumbs-up at the beginning of June, with a 100 percent 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.  

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 FirstRand stake, which owns a portfolio of financial services franchises such as First National Bank (FNB), RMB, Wesbank, Aldemore and Ashburton Investments, will leave RMH with its property portfolio.

Its RMH Property has a 27.5 percent stake in Atterbury and a 37.5 percent 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 R5.41 billion in value for its shareholders and RMH is the founding and largest shareholder in FirstRand.

BUSINESS REPORT 

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