Cape Town – Hosken Consolidated Investments (HCI) said last week it had acquired another 38.5 million shares in Mettle at 43c, pushing its stake in the financial services group to 52.1 percent. In a renewed cautionary HCI said it was obliged, due to a pledge to the Securities Regulation Panel, to make an unconditional offer to Mettle minorities. “The executive committee of the [panel] has ruled that the offer to be extended to minorities be at 50c a share,” HCI said, cautioning shareholders to be careful in their trading until more details were available. The background to the story is that Mettle, which last year chose not to press ahead with its delisting plans, has been steadily buying back its own shares in the market. This has resulted in HCI, its biggest shareholder, recently accumulating a stake of 49 percent in the company. In terms of regulations, HCI would need to make an offer to Mettle minorities if this stake rose above 50 percent. This has now happened after HCI, in the past few weeks, bought another 38 million shares through the market. The next development would be for HCI to put out a circular, detailing its offer to minorities.   The big question is where this leaves Mettle. If HCI pushes up its stake even more, shares in Mettle will be tightly held between HCI and the management of the financial services company, with a minute free-float. The question will then arise whether Mettle management will opt for a delisting. Unconfirmed talk is that Mettle is scheduled to release a cautionary this week, shedding more light on current events. Mettle originally reverse-listed on to the JSE Securities Exchange after it acquired financial services group Greenwich early in 2001. After a lot of pressure from institutional shareholders as well as minorities last year, Mettle management opted not to delist. In the half-year to September, its core operations did well but operating revenue was knocked by the disposal of its London brokerage business as well as adjustments to accommodate new accounting standards. Shares in Mettle closed Thursday’s trading session unchanged at 49c. HCI stock also closed unchanged at R3.50.

Source: Business Report – Vera von Lieres