PPC merger opposition grows

Visio Capital Management, which holds seven per cent of PPC shares, is the latest investment manager to object to a partial conditional offer for AfriSam-Fairfax merger.

Visio Capital’s position sees at least 25 per cent of shareholders opposing the merger. Earlier this week, Value Capital Partners, which owns around five per cent of PPC stock, had rejected the offer made by Canada’s Fairfax Africa Investments saying the intrinsic value of PPC was at least ZAR10/share. Fairfax had undertaken to buy ZAR2bn of PPC ordinary shares at ZAR5.75/share. In addition, in October, Prudential Investment Managers, which holds around 14 per cent of PPC shares, said it opposed the proposed PPC-AfriSam merger as this undervalued PPC.

Visio Capital added that it cannot support the merger as there is no certainty to its final outcome, according to Visio Capital fund manager, Douglas Wallace. Material uncertainties exist around the potential competition remedies that would be required, which could be value destructive, he added. South Africa’s Competition Commission could take at least 12 months to provide clarity on this, Mr Wallace said.