Alexander Forbes halts Mercer share buybacks


Alexander Forbes halts Mercer share buybacks

Published Date: 2020-03-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Alexander Forbes halts Mercer share buybacks

The companies say they will revisit the share repurchase at a later date once markets have settled.

Alexander Forbes and Mercer Africa have frozen a share repurchase deal due to the economic turmoil caused by the Covid-19 pandemic. The companies say because there has been a material change in market conditions and outlook, they mutually agreed not to proceed with the deal now but would revisit it at a later date.

Mercer had planned to substantially reduce its stake with Alexander Forbes but retain its commercial relationship with the local employee benefits business. Under the deal, announced in January, Alexander Forbes would buy 200.8 million of its shares back from Mercer, equal to a 15.6% stake, at 515c per share. In a separate transaction, empowerment shareholder African Rainbow Capital (ARC) agreed to buy an additional 193 million shares in Alexander Forbes. It would then exchange its shares in Alexander Forbes Limited for shares in Alexander Forbes Group Holdings, giving it 35.51% of the listed group.

Alexander Forbes said ARC was still going ahead with its part of the deal, buying the shares at 525c each for a total consideration of R1.01 billion. The transaction was subject to regulatory approval and was expected to be completed in about four weeks.

The company's shares closed 3.1% lower at R3.50 yesterday. African Rainbow Capital fell 10% to R2.60.

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