THE BOTTOM LINE
What’s behind Piet Viljoen’s bid for lame-duck Astoria?
RECM & Calibre may be shooting the lights out, but its target purchase has misfired badly since listing
Why Piet Viljoen, a value investor to his core, wants Astoria, a listed investment vehicle with positions in assets like Apple, is one of the more curious aspects of the tilt by RECM & Calibre (RAC).
Viljoen’s listed investment company has made an offer of R13.50 per Astoria share – a price that hasn’t been seen since Astoria listed to considerable hype on the JSE in November 2015, after which it promptly headed south.What’s really foxing investors is the structure of the deal: RAC only has R355-million of cash to pay for Astoria shares: the rest it would buy using its illiquid and undervalued participating preference shares. On the face of it, these seem like a no-brainer – their value is RAC’s NAV of R28, and yet their 30-day weighted average traded price of last week was only R19.95.
But were all 100% of Astoria’s presumably impatient shareholders to tender their stock, they’d end up getting only about R11 a share, under a set of scenarios detailed by the company this week. Still, as it turns out, Viljoen really doesn’t want them to: he’s hoping to get just 50.1% of acceptances in which case RAC won’t have to dilute itself and offer any pref shares at all.
While he’s keeping mum on what RAC has planned, Viljoen believes that Astoria investors would be better off in a vehicle that has consistently beaten both the JSE All Share and MSCI world indexes over the past five years: RAC’s net asset value per share has compounded by 16.1% per year since listing in 2010, against the All Share’s 14.1%. It’s hard not to argue that anything, at this point, is better than the negative 17% Astoria’s handed investors since going public.