Santam

Ghost, a little bit of a theme in today's, uh, segment, and that'll be around insurance.

Let's first start out with Sanlam, who will be buying out the, uh, remaining third of shares they don't own in Santam.

Uh, perhaps you can just give us a bit of background on this transaction, and why is it that suddenly Sanlam feel the need to own all of the short-term insurance company?

Hello, Gary.

Yes, it has been quite a week for insurance.

I feel like I can guess what your next question might be.

But let's deal with Sanlam and Santam first.

Now, those two names, obviously very similar, but Santam is the short-term insurance house, and Sanlam is basically just an absolute giant.

Some investment news.

Santam's market value jumped by almost eleven billion rand after Sanlam announced plans to acquire the shares it does not already own.

Santam's share price rose nineteen percent on Monday to forty-seven thousand five hundred cents, while its market capitalization increased from about forty-four billion rand to fifty-four point seven billion.

Sanlam is offering five hundred and five rand a share, representing a premium of roughly twenty-six percent on Santam's previous closing price.

The proposed deal would take Santam off the JSE after sixty-two years of trading while giving Sanlam full ownership of the insurer.

We are now joined by Sashen Singh of Nedbank.

He attended the ESG and Sustainability Conference that was held last week.

This one isn't.

So Sanlam owns 62.7% of Santam, South Africa's leading general insurer.

But it is now offering 505 rand a share in cash to buy out everyone else.

And if this deal goes through, Sanlam will own Santam outright, and the insurer will leave the JSE after 62 years.

Now, the most interesting part for me is how much Sanlam is willing to pay for these shares.

So this 505 rand offer is a 26.6% premium to Santam's closing price before the deal was announced.

As a result, Santam's shares jumped to 475 rand after the news, but it still finished below the offer.

Sanlam's CEO says that full ownership would remove, you know, duplicated listing costs and also make it easier for the group to decide where to allocate its capital.

And then also when we see a stronger rand, we also tend to see a positive impact on the financial sector.

But I think the biggest story in financials today really was San- Sanlam's decision to buy out, uh, minority shareholders in Santam.

So Sanlam was a almost 70% shareholder of Santam to begin with.

Uh, and we've been waiting a very long time for them to pull the trigger here.

Uh, but yeah, they are buying their general insurer, and it's expected to be earnings accretive, so positive for profitability, uh, as well as returns accretive for, uh, Sanlam investors.

And if you look at Santam, uh, prior to, to the news breaking, uh, that, that share price was 24, 25% below where it is right now.

So a really good outcome for Santam shareholders as well.

And a much easier business or much cleaner business by the end of it because from what we understand there, of course, the, this would then mean that Santam would potentially be delisting, uh, going forward and Sanlam would remain as a listed business.

And then also when we see a stronger rand, we also tend to see a positive impact on the financial sector.

But I think the biggest story in financials today really was San- Sanlam's decision to buy out, uh, minority shareholders in Santam.

So Sanlam was a almost 70% shareholder of Santam to begin with.

Uh, and we've been waiting a very long time for them to pull the trigger here.

Uh, but yeah, they are buying their general insurer, and it's expected to be earnings accretive, so positive for profitability, uh, as well as returns accretive for, uh, Sanlam investors.

And if you look at Santam, uh, prior to, to the news breaking, uh, that, that share price was 24, 25% below where it is right now, so a really good outcome for Santam shareholders as well.

And a much easier business or much cleaner business by the end of it, because from what we understand there, of course, the, this would then mean that Santam would potentially be delisting, uh, going forward and Sanlam would remain as a listed business.

Um, I suppose it was inevitable.