Outsurance Group has announced plans to acquire the remaining shares in Outsurance Holdings Limited (OHL) from minority shareholders in an all-share deal worth approximately R10.2bn. This move aims to simplify the group's corporate structure. The deal will result in the issuance of new ordinary shares in Outsurance Group to the OHL minority shareholders based on a specified exchange ratio.
The minority shareholders of OHL, including the original founder, current executives, managers, and employees, collectively hold 7.17% of OHL. The acquisition will create a single shareholder level across the Outsurance Group. After implementation, OHL will become a wholly owned subsidiary of Outsurance Group. This transaction aligns with the group's objective to consolidate the remaining minority shareholding in OHL.
The proposed transaction will enable the full consolidation of OHL, which owns the majority of the assets responsible for conducting the Outsurance Group's underlying insurance and related administrative activities. At the time of listing, Outsurance mentioned that one of its key objectives was to monetize the assets held through RMI Treasury Company. This was necessary to facilitate the proposed consolidation of the remaining minority shareholding in OHL.
The exchange ratio for the deal will be determined using the 30-day volume-weighted average price of Outsurance Group shares from October 6 to November 17. The transaction is expected to become effective on November 24, subject to regulatory approval and shareholder approval. The deal is part of Outsurance's strategy to streamline its operations and enhance its corporate structure.
Outsurance recently reported strong full-year results, with a stellar performance from its South African operations. The group's normalized earnings for the year to end-June grew 20.9% to R6bn, with normalized earnings per share up 18.9% at 363.3c. The group declared a final dividend of 170.8c per share, resulting in a full-year payout of 291.5c, representing a 22.7% increase on the previous year.
In addition to the final dividend, Outsurance also declared a special dividend of 87.5c per share, resulting in a full-year special dividend of 117.8c. The group's performance was driven by its South African operations, which contributed significantly to the growth in earnings. Outsurance's results reflect its strong market position and operational efficiency.
The acquisition of minority shares in OHL will further enhance Outsurance's financial performance and simplify its corporate structure. The deal is expected to have a positive impact on the group's operations and shareholder value. Outsurance's strategic initiatives aim to drive growth and improve its competitive position in the market.
Key points
- Outsurance Group to acquire minority shares in Outsurance Holdings Limited in an all-share deal valued at R10.2bn.
- The deal aims to simplify the group's corporate structure and create a single shareholder level across Outsurance Group.
- The transaction is expected to become effective on November 24, subject to regulatory approval and shareholder approval.
