Financial Services Editor
INVESTMENT banking group AMB Holdings won approval yesterday from more than 98% of its shareholders for its plans to buy back 18-million of its own shares, at a fairly smooth general meeting that countered speculation of a shareholder revolt over the plans.
The group also disclosed yesterday that Investec Bank was the party that had earlier bought Credit Suisse First Boston's stake in AMB, warehousing it in a vehicle named Heywood Investments for a future empowerment partner.
Investec bought more AMB shares in the market to raise the stake to 28%, and AMB hopes to tie up a new empowerment shareholder by end-June. Management would be part of the new empowerment consortium, although AMB CE Andrew Sprague said yesterday no decision had been taken on how many shares would be allocated to management.
After yesterday's shareholder meeting, AMB now has the go-ahead to clean up its balance sheet by buying back and canceling shares held by structures set up three years ago and financed by AMB itself. Proceeds of the buybacks will be used to pay back the loans involved.
The buyback shares included empowerment group Pamodzi's stake as well as shares held in AMB's employee loan scheme and share incentive trust. No cash is involved in the buybacks, which will increase AMB's tangible net asset value by 5,4% to 955c.
A string of media reports suggested that minority shareholders were dissatisfied with the buyback proposals and that the meeting would be a controversial one. However, there was little evidence of dissenting minorities at the meeting, although Brian Christie, a merchant banker acting on behalf of some unnamed minorities, was vocal in his opposition, raising questions about AMB's intentions.
The three buyback resolutions gained the support of 98,5%, 99,7% and 98,4% of eligible shareholders.
AMB chairman David Winckler said the structures being unwound through the buybacks had complicated AMB's balance sheet and caused confusion among analysts, counterparties and investors. The support from shareholders showed their confidence that AMB was doing the right things.
AMB is also busy buying out minorities in listed private equity subsidiary AMB-Pep. Sprague said it would focus in the next couple of months on this and on talks with potential new empowerment shareholders. Once the restructuring was complete, AMB management could once again focus on operations.
Once the buybacks are complete, Allan Gray clients, including the Transnet pension fund, will hold 35% of AMB, with Heywood holding a 28% and a further 15% in the share incentive trust.
Apr 30 2003 06:47:42:000AM Hilary Joffe Business Day 1st Edition
Wednesday
30 April 2003
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