AG backs Old Mut; SA pub in world Top 100; Zille wants DA chair; US IPOs freeze

By Alec Hogg

  • Africa’s largest privately owned asset manager Allan Gray, whose clients own 10% of Old Mutual, is backing the life assurer’s actions against its former CEO Peter Moyo who last week sued the company for R250m. According to Bloomberg, Allan Gray has consulted with Old Mutual and believes the board, as shareholder representatives, should be able to dismiss CEOs without any need for cash settlements. Portfolio manager Jacques Plaut said Old Mutual’s board is following the correct course of action. The assurer fired Moyo after the former CEO, through his company NMT Capital, paid himself and other ordinary shareholders a chunky dividend while bypassing preference shareholders which included Old Mutual. Although Allan Gray is supportive, not all shareholders are similarly aligned. Bloomberg reports that Sandton-based All Weather Capital, which has R10bn under management, says the R250m settlement would bring closure to a distraction which it says the board has handled appallingly. Prudential Investment Managers, which owns 4% of Old Mutual, is also in favour of an out of court settlement but says the R250m demand is too high. Old Mutual says it will vigorously defend any claim by Moyo maintaining it was right to fire the former CEO.
  • The US’s previously steaming market for new listings has turned ice cold after investors dropped money on loss-making start-ups like WeWork and Uber. Research by Dealogic data shows US companies which went public this year have badly lagged the growth in the overall market – newcomers delivering a return just 5% above their IPO prices compared with 18% for the S&P500 Index. Also, according to a research note from Goldman Sachs, this year’s performance of IPO stocks has been the worst since 1995. The Wall Street Journal reports what is seasonally the busiest time of the year for new listings is very quiet with IPO activity coming to a virtual standstill. After a brisk start led pundits to predict this would be the busiest year ever for IPOs, 2019 is now unlikely to even make the top five years. Apart from WeWork’s well documented decision to postpone last month’s listing, a similar course has also been taken in the past fortnight by other loss-making startups Endeavour Group, an entertainment firm, and biotechnology business ADC Therapeutics.
  • Helen Zille, the 68 year old former Premier of South Africa’s Western Cape province, has come out of her self-imposed retirement from politics. She has applied for the position of chairman of the Democratic Alliance’s Federal Council. Incumbent James Selfe, who is four years younger than Zille, has held the post since 1999 and in addition to being an MP is the party’s shadow minister on Correctional Services. Zille made the announcement on Friday when resigning as a Senior Policy Fellow at the Institute of Race Relations, citing the decision to submit her nomination to contest for a post which is effectively CEO of the political party and similar to the Secretary General role at the ruling ANC. In a post to her 260,000 Facebook followers, Zille said she had been approached by various senior DA leaders to stand for nomination and help the party begin a process of reconnecting with voters. She said: “I love the DA and the values it represents – freedom, fairness, opportunity and diversity. In recent months the DA has been through a period of turmoil and distress. South Africa cannot succeed unless the DA succeeds. I am prepared to work hard and to play my part in saving our democracy.” Zille, who tweets regularly and sometimes controversially to her 1.4m Twitter followers, resigned as leader of the DA four years ago. She was succeeded by Mmusi Maimane who has come under pressure recently following the party’s poor showing in May’s general election.
  • On a lighter note, Johannesburg watering hole Sin+Tax, sited at the corner of Jan Smuts Avenue and Bolton Road in Rosebank, has been named among the top 100 bars in the world. It is the first bar in Africa to join the annual list compiled by William Reed Business Media which is now in its 11th year and voted for by 500 drinks experts from across the world. Sin+Tax came in at position 88 on the 2019 list, which was released on Thursday night in London. The table is headed by Dante, an all-day Greenwich Village New York bar owned by Australians, with London’s luxurious Connaught Bar in second and Floreria Atlantico of Buenos Aires third. Bloomberg reports that Dante moved up from ninth last year. London has 10 bars in the global top 50 with New York six.