Alex Forbes is facing a ‘de facto’ takeover | IOL Business Report

JOHANNEBSURG - Financial services firm Alexander Forbes is set to emerge as the biggest loser in a deal that would see it dispose of its short-term insurance business to Sanlam, with Alexander Forbes’s second-biggest shareholder African Rainbow Capital said to be front and centre of the deal. ARC is a wholly owned subsidiary of Sanlam’s biggest shareholder, Ubuntu-Botho, the investment vehicle of business magnate Patrice Motsepe, who also serves as Sanlam’s deputy chairperson.

“The short-term insurance business has been a solid growth engine for Alexander Forbes and covers an element of fixed costs. Any sale of this would, therefore, be counter-intuitive to the notion of shareholder value creation,” the source said.The mooted sale of the asset comes despite the Alexander Forbes board just last year showing faith in the growth prospects of the business and the overall Ambition 2022 strategy crafted under Darfoor’s watch with improving results being delivered.

Alexander Forbes chairperson Nonkululeko Nyembezi, in an emailed response, said the group had reiterated its commitment to the broader strategy of growing the business of Alexander Forbes in its core market segments. Business Report has it on good authority that ARC co-chief executive Johan van Zyl, who also wears the hat of Sanlam chairperson and chief executive of Ubuntu-Botho, is instrumental in seeing the deal through.

“Therefore, my suggestion is that you sell your general insurance book to another player of scale. In this way, you will not only get good money for your book , which can be either returned to shareholders or used for focused acquisitions in areas where you can win.”Van Zyl referred all questions directed to ARC to Ainsley Moos, corporate and stakeholder relations at the group.

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