Women power

Advantage Asset Managers have agreed terms with a potential black economic empowerment shareholder - broad-based women’s development and empowerment group WDB Investment Holdings (WDBIH) - to take a stake in the business.

Making the announcement in Johannesburg, Advantage Asset Managers MD Morris Mthombeni said that the new partner was a natural fit for the company: “Firstly we have a broad-based BEE partner, which has similar long term goals and a clear commitment to add value to the business.

“Secondly we have created a staff shareholding scheme that exposes employees to the upside of the business. And lastly we believe that funding mechanism is firmly within the spirit of the Financial Services Charter.”

The staff shareholding scheme – in the form of a staff trust is aimed at previously disadvantaged individuals. “Between the two groups they will hold an initial combined stake of 15% in the business,” commented Mthombeni. WDBIH will hold 11.5%”.

If one takes into account the BEE shareholding in the holding companies, the announcement means that the direct and indirect BEE shareholding in Advantage is in excess of 25% threshold set by the Financial Service Charter.

Sonja Sebotsa, executive director of WDBIH, said: “WDBIH’s 100% shareholder - the WDB Trust - focuses on the upliftment of rural women and WDBIH’s need to create sustainable long term value for our Trust is mirrored by the approach that Advantage takes with their retirement fund clients in creating sustainable long term returns.

“WDBIH’s participation at shareholder level reinforces the senior women’s operational involvement that we were pleased to find at Advantage.”

There will be board representation for WDBIH on the Advantage Asset Managers board.

Jaap du Toit, non-executive director of Advantage says “The transaction will be fully vendor financed by Advantage Asset Managers, and equity transfer and full ownership, and unrestricted voting rights accrue immediately. “

Du Toit says that the discount given to the partners amounts to an initial 10% discount to the valuation and a favourable vendor facilitation rate, thereby creating immediate value.

“This discount on the total value translates to a significant discount on the 15% BEE deal. The partners will also benefit from being able to access a portion of the dividend flow,” explains du Toit.

Frans Truter, deputy chairman of Advantage, is especially proud of this latest corporate development in Advantage, as it comes on the back of a successful integration of the multi-management businesses.