THE BOTTOM LINE
New Imperial phase dawns as Motus drives itself offstage
Split in the automotive and logistics businesses of Imperial Holdings will see new listing on the JSE
It has been a long time coming, but in a matter of weeks Imperial Holdings’ automotive business Motus will list on the JSE.
A motivation for unbundling and separately listing the automotive business on November 22 is to bring “strategic clarity” to the automotive and logistics business. This, the group hopes, will result in a better understanding of the two distinct businesses that at the moment make up Imperial Holdings.
Imperial has made a compelling case for the unbundling. The group, which celebrates its 70th anniversary this year, had to break up the logistics and automotive businesses to give the two businesses clear strategic direction and improve operational synergies.
Over the years the company has grown from a single motor dealership in Johannesburg to a conglomerate that houses a vast portfolio of businesses. An evaluation conducted a few years ago revealed that some of the businesses in the group’s fold were non-core and others were underperforming.
The group, which has been listed on the JSE since 1987, is now in the final stages of the separation process. Once the unbundling is complete, Imperial Holdings will change its name to Imperial Logistics.
Allowing the logistics and automotive businesses to achieve their goals separately is expected to unlock shareholder value in the long term.
This week investors were again reminded that a split between the two businesses was necessary. On Tuesday Imperial’s share price fell 6.83%, due mostly to the release of a muted trading update for the logistics business.
Although the outlook for the automotive industry is brighter, the whole group was dragged down by something that would not have happened had the logistics business been listed separately.