There’s a good chance the just-released financial 2025 results will be the last set of figures we see from RMB Holdings (RMH). But it’s far from a certainty. 

On November 18, RMH informed its shareholders it had received a potential offer from Atterbury Property Fund (APF) for 100% of the RMH shares. Promptly after that, the just-released results reveal the RMH board  “received an expression of interest from Atterbury, which is currently under consideration”. 

This non-binding expression of interest was hardly a surprising development; RMH’s most valuable investment is its 38.5% holding in Atterbury, after all, and the remaining 61.5% of the property group is owned by Atterbury ManFou, the ultimate controlling company of APF. That makes APF the most obvious buyer, indeed probably the only buyer.  

Yet APF’s Louis van der Watt is playing it cool, saying there’s no urgency about doing a deal. “We’re looking at it, but we haven’t made up our minds,” he tells Currency. “We’ll review the situation sometime in the new year.” 

‘Very happy’

Just how obvious a buyer APF might be became very evident when, in late October, it emerged as the unexpected purchaser of Coronation’s 28% stake in RMH. This made APF the single largest shareholder in RMH. And Van der Watt says he’s very happy with that stake. 

So, on the surface it looks like it should be a straightforward deal, one that could be wrapped up in a few months, assuming it is eventually launched.  After all, RMH has been in “monetisation” mode since 2020, after it unbundled its most valuable asset – its shares in FirstRand. Since then, shareholders have been waiting to get paid out the value of their shares. 

So, simple enough. APF makes an offer, the RMH board accepts the offer and proposes a “scheme of arrangement” to the shareholders. 

Simple but for one thing: the offer price. None has been disclosed at this stage, but RMH minority shareholders are bracing themselves for a lowball bid. And not without reason.  

RMH has history. Back in 2022, as part of its “monetisation” strategy, RMH sold off its then most-valuable asset, a 37.5% stake in Atterbury Europe, at what many minority shareholders described as a distressingly low price. The company sold the business at R1.75bn, a hefty R512m below the stated net asset value. 

The board dismissed criticisms at the time explaining they had realised the best offer, given that many shareholders were keen to wrap up a deal quickly. Also, the board said, it had been supported by 97.5% (of the 53%) of shareholders who had attended the meeting to vote on the deal. 

Not so smooth

But this time around it might not be so smooth. The minority shareholders, or at least the most vocal of them, are keen to ensure they get full price. They are already concerned APF is setting them up for a low offer. Again, with good reason.

In November, RMH announced it was writing off between 20% and 36% of the September 30 2024 stated net asset value (NAV) of 66c, taking it down to 47.5c. The just-released results reveal the write-off was R272m, equivalent to a full 28% of the carrying value. An unsolicited offer from AFP a few months earlier had prompted the write-off. According to RMH, “this offer constituted direct, entity-specific external evidence that the recoverable amount of the investment may be less than the carrying amount”. 

Brian Roberts, RMH’s group CEO and CFO, tells Currency that in terms of accounting regulations, the board had no choice but to take the write-down. 

Yet shareholder activist Albie Cilliers, who is determined minority shareholders don’t get short-changed a second time, is still targeting the 66c. He says it made sense for APF to make a lowball offer that forces a write-down of the NAV, and “then come along with a slightly better offer, and everyone thinks it’s great”. 

For APF it certainly would be great. As RMH said when it announced the write-off, “the impairment should not be interpreted as a reflection of the underlying performance of Atterbury”. It was merely a reflection of what an offeror was prepared to pay. This means, if it acquires 100%, APF could promptly write back most of the R272m just written off. 

An appropriate price

Of course, not everyone would think it’s a great offer. Cilliers, for one, is unlikely to accept anything below 60c a share for his 15% stake. (Over the past 12 months RMH has traded between 28c and 51c.) 

Cilliers recently stepped down from the Atterbury Property Holdings (APH) board to ensure he was not constrained in his bid to get what he deems is an appropriate price. He is currently unable to buy more RMH shares because, as an APH director, he became privy to inside information.

In addition to Cilliers’ 15% block, it’s possible there are about 10% more shareholders prepared to push back against a lowball offer from APF. 

This means, unless APF makes a reasonable offer, RMH will not be delisted any time soon. 

Non-starter

Certainly, the scheme of arrangement option looks like a non-starter. It would need the backing of 75% of shareholders, attending a shareholder meeting. On average only 55% or so of RMH shareholders ever participate at meetings, which means Cilliers and other opponents would likely be able to block a scheme.  

It’s even possible the RMH board would not provide the backing required to put a scheme to shareholders. A scheme would involve RMH, rather than APF, in deal expenses at a time when RMH is desperately trying to cut costs (hence why Roberts is both CEO and CFO). 

So, a hostile general offer looks the more likely option. But with Cilliers’ opposition, APF will not get the necessary 90% acceptance to force a squeeze-out and delist RMH. That would be a problem for APF, which has let it be known it doesn’t want to be involved in a listed entity. 

A long-drawn-out battle?

And, just for good measure, there’s another complication. 

An additional motivation for APF to get control of RMH has just emerged. It appears that almost 10 years after RMH paid a premium to acquire the Atterbury shares, the shareholder agreement concluded back in 2016 is causing concerns. In terms of the agreement, the RMH board must approve any debt over R25m incurred by APF. That is a major restriction for a company in the costly business of property development.  

To date it seems not to have been an issue. But, according to a brief note in the just-released results, that appears to have changed. 

RMH and Atterbury are now in arbitration trying to determine the authority of the agreement. 

This may help to explain why APF was willing to spend R185m buying up Coronation’s 28% stake in RMH. Not only was it building up a stake ahead of a possible long-drawn-out takeover battle, but with 28%, APF is that much closer to being able to control the RMH board and neutralise efforts to restrict its debt-raising ability. 