Industrial Correspondent
IN THE latest transaction as part of a continuing share repurchasing process, Invicta Holdings said yesterday it would buy back 23% of its shares at a cost of R95m.
The head of the investment holding and management company, Arnold Goldstone, said the motivation for the transaction and previous repurchase deals was that the company could earn good returns.
At a historic price-earnings ratio of about 4,5:1, he said the price at 550c a share was good value.
This was a better way to enhance earnings than for instance making another acquisition at a higher price-earnings ratio, he said.
The financial effects of the repurchase would show a 19% increase in headline earnings a share to 162c while net asset value would decline 8% to 432,8c.
This was based on the year to March 31 this year and assuming that the share repurchase was effected in April last year.
Invicta's policy in the past two years had been to repurchase shares whenever "it made sound business sense to do so", Goldstone said.
The deal would see a warehousing agent purchasing 16956218 ordinary shares from an institutional investor on June 9.
The agent would hold the shares until Invicta had completed the necessary procedures, such as shareholder approval.
The remaining 4-million shares in the block of 20956218 the institutional investor planned to sell originally have been bought by a special purpose vehicle, including directors Goldstone, David Samuels and Michael Rose-Innes.
Meanwhile, the Securities Regulation Panel has waived the requirement for nonexecutive director Christo Wiese to issue a mandatory offer to buy out minorities.
These are the JSE Securities Exchange SA's requirements once a single shareholder breaches the 35% threshold.
May 28 2003 07:11:12:000AM Carli Lourens Business Day 1st Edition
Wednesday
28 May 2003
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