TUESDAY, 11.30PM:
IN a statement issued on Tues evening, Johanesburg Consolidated Investments chairman Mzi Khumalo confirmed that JCI has received an approach from Lonrho in regard to a merger, and that discussions on the issue are under way in earnest.
The statement was issued after a meeting of the JCI board, in the wake of reports that Lonhro is planning a buy-out of JCI.
The board was also expected to grill Khumalo and executive director Brett Kebble over a series of troubled business deals. Some members of the board have been dissatisfied with the way in which the two have been operating — accusing them of following their own agendas and flouting sound corporate governance procedures.
In his statement, Khumalo said the JCI board has ratified the Lonrho/Anglo American asset swap in terms of which JCI will acquire 26,1% of Lonrho plc in exchange for JCI’s interests in the Western Areas and HJ Joel gold mines. The JCI board has also agreed in principle to the de-merger of its remaining gold assets, subject to the requisite appraisals and agreements. The board also approved JCI’s recent acquisition of a substantial number of Beatrix shares.
However, JCI will halt plans to acquire Southern Mining Corporation (SMC), as the board has decided it needs much more information before going ahead with the deal. However, it will look into a number of opportunities in the heavy metals sector, including SMC.
Regarding corporate governance, the board decided to meet more often and, when appropriate, to call special board meetings to deal with extraordinary issues.
The statement did not explicitly address the issue of the relationship between Khumalo and Kebble, which has reportedly become increasingly strained. Reports earlier in the week speculated the two were planning to part ways, and propose an unbundling of JCI.
TUESDAY, 10.00AM:
WHILE local markets wait with bated breath to hear the fate of JCI bosses Mzi Khumalo and Brett Kebble at Tuesday’s board meeting, multinational Lonrho has confirmed that it is in discussions with JCI on a possible takeover.
In a press statement on Monday, Lonrho said: “The board of Lonrho confirms that it is in discussions with the board of JCI, which may or may not lead to Lonrho making an offer to acquire the share capital of JCI.”
Speculation is rife at present about the possible offer price, with expectations that JCI shareholders will only agree to the buyout at a substantial premium to the current share price. JCI’s shares traded 90c higher at R24,75 on Monday, brining total gains this month to 690c. Khumal bought JCI a year ago at a price per share of R54,50.