Sanlam/Santam proposal

9 September, 2006 at 12:38 pm | Posted in Companies | Leave a comment

Those scanning Sanlam’s interim financial results (released on Thursday morning) for news on the institution’s proposal to buy out minorities at its short term insurance subsidiary Santam would be disappointed.

Obviously the price at which such a buyout would be exercised is critical, but Sanlam seems some way off from making its official pitch known.

Directors noted only that “in a further significant step towards establishing Sanlam as a well-diversified financial services group, the board decided to commence with a formal process that may lead to Sanlam extending an offer to acquire all of the Santam shares not already owned by the group”.

They said the process was ongoing and shareholders would be informed of progress made.

What the Sanlam directors did reiterate was that the acquisition of Santam minorities would be pursued “on acceptable and value enhancing terms”. Of course, the question at this delicate juncture would be: “value enhancing to who – Sanlam or Santam minorities?”

Santam’s contribution to Sanlam’s profit dropped 43% to R304m (previously R532m) on the back of a reduction in underwriting performance.

While it seems Sanlam have timed their buyout pitch to a lull in Santam’s performance, there is no doubt that the short term insurer is still a robust business.

New business values for Santam were up 18% to R4.9bn in the half year to end June, while net business inflows for the interim period topped to R1.4bn.



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