Sanlam Buys 25% Stake in Unit That Owns Motsepe's TymeBank
“The transaction adds value for shareholders as Sanlam is swapping its current investment for a higher-returning one at a reasonable price,” Adrienne Damant, an analyst at Avior Capital Markets Pty Ltd. said in an emailed note. “Additionally, we believe Sanlam can leverage TymeBank’s distribution network to sell insurance products to South Africa’s mass market.”
Sanlam extended its slide for a second day Monday, shedding as much as 4.1%. African Rainbow Capital Investments climbed as much as 9.2%
The 25% stake will be treated as an investment in an associate, Sanlam said in a regulatory filing on Monday.
Read more: Motsepe’s ARC and Sanlam Start South African Life Insurer
The proposed deal is a “natural extension” of Sanlam’s existing interest in African Rainbow Capital Financial Services Investments and the insurer will continue to explore ways to collaborate strategically with the holding company and its portfolio investments, according to the filing.