News24 | Sanlam makes cash bid to buy out Santam shareholders and delist it

Sanlam currently holds a 62.7% stake in the short-term insurer Santam. It wants to take complete ownership, which will result in Santam’s delisting from the Johannesburg Stock Exchange, the Namibia Securities Exchange and A2X.

Supplied/Santam

• Sanlam wants to buy out Santam’s minority shareholders and delist the short-term insurer.
• Sanlam is making a cash offer of R505 per Santam share, which is 25% higher than the average price over the past month.
• Should the deal succeed, Santam will be delisted after more than 60 years on the JSE.
• For more financial news, visit News24 Business.

Santam shares surged on Monday afternoon after its parent company, Sanlam, offered to buy out minority shareholders and delist the short-term insurer.

Sanlam holds an almost 63% stake in the short-term insurer.

Santam shares jumped almost 16% to R460.79 after Sanlam said it would offer R505 in cash per Santam share it does not already own. The price is 25% higher than the volume-weighted average price over the 30 days before the announcement.

“Bringing Santam fully into the Sanlam Group aligns ownership with the operational relationship that already exists, while providing Santam minority shareholders with an attractive cash liquidity opportunity at a premium,” Sanlam CEO Paul Hanratty said in a statement.

Sanlam wants to delist Santam from the JSE, and does not require any additional shareholder approval, given its majority shareholding.

Both Sanlam and Santam were founded in Cape Town in 1918, with the former specialising in long-term or life insurance while the latter wrote short-term policies such as car and household insurance. Santam, which is an acronym for Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappy*, listed on the JSE in 1964, while Sanlam remained a mutual company until its own listing in 1998.

Sanlam said consolidating its Santam ownership would simplify its structure and remove constraints associated with maintaining a separate listing, as it would sharpen strategic decision-making and simplify governance and reporting across the group.

The deal will also provide clients with a more integrated financial services offering spanning general insurance, life insurance, and asset management.

The transaction may also boost liquidity in Sanlam shares as the broader group will now have its shareholdings consolidated into a single listed vehicle rather than two separately listed entry points.

The Santam board considered the proposed deal and, after consulting with experts, has given its unanimous support for the deal and will recommend that eligible shareholders vote in its favour at a general meeting to be held on or about 30 November.

The deal is expected to be completed by the first quarter of 2027, subject to regulatory approvals and various conditions being met.

Santam CEO Tavaziva Madzinga said the deal would give its shareholders “an attractive, cash-certain outcome at a meaningful premium, while giving the business full access to the scale, capital strength and diversified capabilities of the Sanlam Group”.

Sanlam will apply to the Namibia Securities Exchange to delist Santam from its mainboard, and to A2X Markets to terminate its secondary listing on the alternate exchange.