RMH lives on – so does the fight

Finally, at 2.11pm on Friday May 29, Rand Merchant Bank Holdings (RMH), as we’ve known it for decades, ceased to exist.

Exactly 2.11pm was when the shareholders’ meeting called to appoint a new board was closed – just 11 minutes after it had commenced. One of the most uneventful RMH shareholder meetings in years.

The old board, led by chair Herman Bosman and CEO Brian Roberts, have departed and a new, much-slimmer board has been appointed. At just half the size, it has three non-executive directors – Andrew Brooking, Pine Pienaar and Nicolaas Kruger. All three claim to be independent.

And therein lies the first of the likely new controversies facing RMH. Shareholder activist Albie Cilliers, who controls about 20% of RMH, says Brooking’s long-term association with Atterbury Property, which is part of the AttBid consortium that holds 47.9% of RMH, means he cannot be classified independent. Cilliers asked the meeting on Friday how it was Brooking could describe himself as independent given his ties to Atterbury. He received no response. Brooking was not at the meeting.

This might seem academic, and it will be until three independent directors are needed to vote on some or other corporate action. Then expect things to grind to a halt as Cilliers challenges Brooking’s independent status.

A ‘low-ball offer’

Friday’s changing of the guard was tagged to coincide with the closure of AttBid’s mandatory offer to RMH shareholders. That offer, which opened in early April, was pitched at 47c a share.

Hardly surprising, given all the controversy about how “low ball” the 47c was, the offer did not attract much response. Even the old RMH board described it as “reasonable but not fair” in the independent opinion it was required to give. Shareholders with just 4.15% accepted it.

That small stake pushed the combined Atterbury Property Fund (APF) and AttBid holding to 47.9%.

This is way short of the 90% the consortium initially targeted – a level that would have allowed it to delist the company. Atterbury’s Louis van der Watt has made no secret of his desire to avoid the expense and red tape associated with a JSE listing.

After Friday’s meeting, Van der Watt told Currency he would not be extending the offer period: “We are happy with the results.”

So, it seems that for now – and the foreseeable future – RMH will remain listed.

Hostile minority shareholders

However, with at least 30% of the shareholders feeling deeply aggrieved by what they described as APF/AttBid’s “low-ball” 47c offer, life as a listed entity will not be easy for RMH.

With a large and hostile group of minority shareholders there is more at stake than just listing-related expenses. What seems certain is that the new Van der Watt-led leadership will struggle to pass any special resolutions. These resolutions need the support of 75% of shareholders.

Cilliers tells Currency that Van der Watt may even have trouble passing ordinary resolutions in cases where the matter is related to the major shareholders. For instance, where RMH may be doing a deal with Atterbury. If that were to happen, the AttBid/APF block of shares could be prevented from voting.

Given that RMH’s main asset – other than a chunk of cash – is its 38.5% stake in Atterbury Property Holdings, it’s probably a case of when it happens rather than if.

All in all, it’s difficult to see where this leaves RMH, other than as a continuing source of great media fodder. An obvious solution to the impasse is to make a more generous offer to the recalcitrant shareholders. Cilliers, who is the largest, won’t mention a figure. But he has long indicated his unhappiness about the RMH board’s 2025 decision to write down the net asset value from 66c a share to between 42.3c and 52.7c a share. So, there’s a clue.

Rozendal Partners, which holds about 7%, has made similar criticisms.

However, those who know Van der Watt say an increased offer would not sit easy with him. They suspect he may be hatching an alternative plan.

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_{Top image: Atterbury’s Louis van der Watt. Picture: atterbury.co.za.}