Sanlam has proposed buying the Santam shares it does not yet own at 505 rand per share, in a proposal announced on 5 October that would lead to Santam's delisting. The South African group already controls 62.7% of the share capital, excluding treasury shares.
Payment would be made in cash by its subsidiary Sanlam Life. For the minority shareholders concerned, the proposed price is 26.6% above the closing price on 2 October, set at 399 rand, and 25% above the volume-weighted average price over the previous thirty days.
The buyout must go through a scheme of arrangement subject to the conditions set out in the companies' joint announcement. It is therefore not yet a completed acquisition. Completion would see the shares removed from the Johannesburg Stock Exchange, where Santam has been listed since 1964, as well as from the Namibian and A2X markets.
Sanlam says it wants to simplify its structure and have greater flexibility in allocating capital within the group. Eliminating the costs of a separate listing is among the savings expected by the acquirer.
In Namibia, the transaction would also affect the supply of shares available to investors. According to market data cited on 8 October by The Namibian, Santam then accounted for 5.15% of the value of share trades recorded on the local exchange since the start of the year.
The companies plan to publish a circular by around 3 November setting out the full terms, the independent expert's opinion and the timetable for shareholder consultation. The document must set out the next steps for the buyout.