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HOT WEEK AHEAD FOR METTLE MANAGEMENT

Cape Town – The Mettle delisting saga unfolded further yesterday when Investec Asset Management, one of the institutional shareholders that is actively opposing the delisting, said it would turn up the heat on Mettle’s management this week. This comes ahead of a meeting on Friday when shareholders will vote on whether the specialist financial services company should delist and whether management, with the support of Hosken Consolidated Investments (HCI), should make a buyout offer of 60c a share to minorities. HCI has a 40,8 percent stake in Mettle. Investec, which holds between 8 percent and 10 percent of Mettle, and Allan Gray Investments, with a far smaller shareholding, are both opposed to the delisting. This is one of the rare examples of institutional shareholders, which hold the majority of shares in South African companies, taking an active stand against a decision by management and encouraging minorities to do so too. Investec said Mettle’s buyout offer of 60c a share was far too low; it took advantage of minorities unwilling to hold an unlisted investment as well as of unit trusts, which were not allowed to hold unlisted investments. Gavin O’Connor, the managing director of Mettle, reiterated that the company was moving forward with its delisting plans as well as its offer to minority shareholders of a buyback price of 60c a share, which management believed was fair. Investec argued that a buyout price of about R1,20 a share would be more acceptable. Piet Viljoen, the chief investment strategist at Investec Asset Management, said: “Investec believes management and HCI are taking advantage of certain loopholes in the JSE Securities Exchange regulations E we will vote against both issues.” Investec encouraged all other shareholders to vote against the proposals, saying it would be in the best interests of shareholders not to accept the offer and to remain invested in the unlisted company. The delisting would not affect long-term investors apart from effectively closing the market to them for a number of years, should Mettle decide at some point to list again. “Each week the market closes on Friday afternoon and only reopens on Monday morning, but this does not seem to bother shareholders,” Vijoen said. “Just think of the delisting as an extended weekend, and let management work for you.” Simon Marais, the executive chairman of Allan Gray, said the investment manager opposed the delisting and Investec would be acting on behalf of Allan Gray at the shareholders’ meeting. Mettle’s share price inched 1c higher yesterday to 59c.

Source: Business Report – Vera von Lieres