THE JSE is seemingly no longer a happy place for several Cape Town companies.
In short succession three small Cape Town-based companies have opted to delist from the JSE – meaning they will no longer be open to public scrutiny…or subject to increasingly stringent listing regulations.
Construction group Mazor (which specialises in claddings for buildings), KayDay (which manufactures timber boards) and Mettle (which is a specialist financier) have either left or are in the throes of leaving the JSE. Mazor and KayDav have been listed for around a dozen years, while Mettle – formerly part of Christo Wiese’s Tradehold – was only listed two years ago.
Mettle is subject to a takeover by another financial services entity, which shareholders understandably supported because of a premium priced buyout offer.
The major shareholder in Mazor and KayDav respectively are buying out minority shareholders – at prices, some may argue, undervalue the operating assets and discounts prospects in a post-Covid19 environment.
Because of a lack of tradability in both these companies’ shares, the respective buyout offers – even though not reflective of the real underlying value – were not resisted too strenuously.
Both KayDav and Mazor have endured some highly successful years on the JSE, and paid solid dividends. But a general lack of interest in smaller companies on the JSE neither company would realistically be able to use the exchange platform to raise fresh capital, or use its paper (shares) to make acquisitions.
Mazor has traded in the red recently and probably leaves the JSE at a low point for the general construction sector. KayDav, on the other, hand looks in finer fettle with prospects bolstered by an upturn in the timber market.
The delisting of these three counters follows the buyout of Pioneer Foods by PepsiCo, and subsequent delisting of that Stellenbosch-based company from the JSE.
The big question for the year ahead is whether more Cape Town-based companies might decide to exit the JSE.
Already Trencor, which was started by the Jowell family more than 50 years ago, has disposed of most if its operational assets involved in the container leasing sphere.
Once Trencor pays out its cash holdings to shareholders the company is likely to delist from the JSE.