Old Mutual’s private equity arm has proposed R5.80 per share for Long4Life, valuing the SA investment company founded by entrepreneur Brian Joffe at about R3.7bn.
Joffe has repeatedly said that the discount at which its shares trade has hobbled deal making for the group, as it is difficult to find acquisition targets that offer a better return than simply using cash to buy back shares.
In morning trade Long4Life’s shares were up 5.16% to R5.50, on track for their best day in about seven weeks. The shares have risen by two thirds so far in 2021, but have lost about a fifth since listing.
Bidvest founder Joffe listed Long4Life in 2017 with a view to building a portfolio of brands catering to growing demand in SA for better lifestyles. The group’s portfolio includes Sportsmans Warehouse and Outdoor Warehouse, as well as Inhle Beverages and Chill Beverages, the latter known for its Fitch & Leedes mixers.
The group also owns beauty chain Sorbet, and had said in its half-year results it had received an unsolicited expression of interest.
The group has also hired Investec corporate bank to review its structure and value, seeking the best way to unlock value for shareholders.
Long4Life said on Friday the offer was a formal proposal, but did not constitute a firm undertaking to make an offer. The group has constituted an independent board to engage with Old Mutual with regards to the proposed transaction.-bday
