Deutsche Bank Hired by Alexander Forbes for Possible IPO

Alexander Forbes Ltd., Africa’s largest independent retirement-fund administrator, said it hired Deutsche Bank AG and Rand Merchant Bank to advise on a potential initial public offering.

The company is interested in a share sale within the next one to two years and will also consider a sale to another company, Chief Executive Officer Edward Kieswetter said in a telephone interview from Johannesburg today.

Alexander Forbes, which started in 1935, was acquired for 8.2 billion rand ($821 million) in 2007 by a group led by private equity firm Actis Capital LLP. Kieswetter, who took up his job in 2010, said while the company will prepare itself for an IPO, he’s “agnostic to the form of exit.”

“If an international player comes with a big check to buy out the consortium, we would also have to be open to that,” he said.

The private-equity firm owns about 50.1 percent of the company, while about 26.5 percent is traded as preference shares. Management holds 8.7 percent.

Exit Opportunities

“Any disposal or exit will involve the disposal of 100 percent of all interests,” Kieswetter said. “A listing or an exit will give all stakeholders an opportunity to benefit. You would imagine that the preference shareholders and the black economic empowerment consortium may want to re-invest.”

The company issued preference shares for institutions that wanted to remain invested after it delisted from Johannesburg’s stock exchange in 2007. The same shareholders, including asset managers Stanlib and Allan Gray as well as the Public Investment Corporation, may be keen to take up stock should Alexander Forbes trade publicly again, according to the CEO.

The company’s preference shares have risen 23 percent this year to 14.75 rand, while the five-member FTSE/JSE Africa Life Assurers Index has gained 4.7 percent.

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