African Rainbow Capital Investments (ARCI), led by billionaire Patrice Motsepe, is set to delist from the Johannesburg Stock Exchange (JSE) and A2X Markets by May 29, 2025, following a resounding shareholder vote. At a virtual general meeting on May 6, nearly 94% of voting shareholders endorsed the delisting, while 98% supported shifting the company’s headquarters from Mauritius to South Africa. This move aims to unlock value for investors, as ARCI’s share price has long lagged behind its net asset value (NAV), trading at a steep discount. The company, which holds stakes in TymeBank and Rain, offered R9.75 per share to buy out minority shareholders, a deal now cleared by voters. However, a looming legal battle in Tanzania over a graphite project could cast a shadow.
The decision to delist stems from ARCI’s struggle to reflect the true worth of its 50-strong portfolio, including a R20 billion valuation for its 20.3% stake in Rain. Since its 2017 listing, ARCI’s shares have traded at a discount exceeding 40% to its NAV, a common issue for investment holding companies globally. This gap has frustrated investors, as the collective value of ARCI’s assets, spanning financial services and telecoms, far outstrips its market price. The Mauritius base, chosen for its tax treaties and business-friendly environment, failed to attract significant foreign investment, while rising operational costs and tax changes made it less viable. Relocating to South Africa, where nearly all shareholders reside, promises cost savings and tax efficiency.
Despite recent portfolio growth, with a 3.2% rise in intrinsic NAV to R12.78 by December 2024, ARCI’s board believes the listed structure hinders future prospects. The delisting, paired with the R9.75 per share offer—12.6% above the March 14 closing price—aims to return value to investors. However, some shareholders worry about missing out on assets like TymeBank’s growth, and a $195 million lawsuit in Tanzania threatens complications. As ARCI prepares to redomicile, it seeks to streamline operations and focus on its South African roots, leaving behind a market that undervalued its potential. With regulatory approvals pending, Motsepe’s vision for a leaner, more agile ARC takes shape.