South African insurer Sanlam said on Tuesday its subsidiary Santam will buy back 10% of its own shares at R102 per share, and will sell 10% to black investors.
Sanlam also said it would make an offer to buy any excess Santam shares tendered at the same offer price. The deal is subject to Sanlam not owning more than 80% of Santam’s shares. Sanlam owns 53% of Santam.
The repurchase offer price represents a premium of 8,5% to the weighted average price of R93,98 per Santam share over five trading days ending last Friday, it said.
The offer will be funded out of cash and liquid assets and will open on March 26 and close on April 20, it added.
Santam’s sale of a stake to black investors will be in line with a government affirmative-action programme for companies to include blacks in the mainstream economy, to redress imbalances after years of exclusion under white apartheid rule.
Santam will sell the stake to its black staff, broad-based community trusts and business partners, it said.
Santam separately said it had posted a slight increase in 2006 headline earnings per share and hiked its dividend.
Santam said in a statement headline EPS for the year to end December rose to 1 555 cents per share versus 1 540 the previous year. Headline EPS is a key profit gauge in South Africa that strips out certain financial, one-off and non-trading items.
Shares in Santam closed at R97,97 on Monday, while those of parent Sanlam ended at R19,80. – Reuters