Major South African insurer wants to delist from the JSE

Clientèle’s board has proposed terminating the insurer’s JSE listing, with plans to offer shareholders a payout.

The insurer has also sealed a deal with a private equity investment firm, in an attempt to increase its black shareholding above 10%.

In a notice to shareholders on Thursday, 30 April, Clientèle outlined its reasons for seeking delisting. 

The company explained that the decision to delist from the JSE was made because its shares are tightly held and thinly traded.

This has resulted in Clientèle shares trading at a substantial discount to its embedded value per share and being subject to volatile price movements.

The company said the lack of liquidity in its shares and the discount in the share price make it difficult for shareholders or potential investors to acquire and sell a meaningful number of Clientèle shares.

“In the circumstances as outlined above, Clientèle is unable to enjoy the full capital market benefits of being listed on the JSE,” it said. 

“In addition, the delisting relieves Clientèle of the additional cost of compliance with the JSE Listings Requirements on a continuing basis and when concluding transactions.”

It added that delisting and no longer being subject to the Listings Requirements will give Clientèle’s management more time to focus its efforts on the company’s strategic growth.

Shareholders are set to be offered a conditional acquisition of their shares for a consideration equal to 85% of the embedded value per Clientèle share as at 31 December 2025, escalated by 7% per annum from 1 January 2026 to the payment date.

“The offer provides shareholders, who wish to sell their shareholding in Clientèle, with the opportunity to do so at a fair consideration,” the company said.

It added that this will also provide shareholders who wish to remain invested in the delisted Clientèle with the opportunity to do so.

Those who wish to remain shareholders in the delisted Clientèle will have the opportunity to exit their shareholding on an annual basis through a put option exercisable during a liquidity window.

The company also announced that it has entered into a subscription agreement with Acacia Empowerment Investments (AEI).

This agreement will see AEI subscribe for 13.6 million shares in Clientèle’s authorised but unissued share capital in exchange for 85% of Clientèle’s interim enterprise value per share.

This price will increase by 7% per annum from 1 January 2026 to the issue date of the AEI subscription shares.

Clientèle’s executive directors and senior managers have also been given the chance to buy into this deal with 4.8 million shares on the table.

The reasoning for its deal with AEI came down to several factors, including Clientèle’s recent acquisition of 1Life Insurance.

This acquisition diluted Clientèle’s black shareholding to under 10%, and the company has actively been seeking a solution to increase it again.

AEI was already a shareholder of Clientèle, with a 6.64% direct stake, and is wholly owned by the Hollard Foundation Trust (HFT).

HFT carries out public benefit activities in a non-profit manner and for altruistic or philanthropic purposes, with beneficiaries that include black women, black new entrants and black people.

“The AEI Specific Issue will allow Clientèle to increase its black shareholding to above 10% and will allow AEI, through the dividends received, to fund the beneficiaries of HFT,” the company explained.

It will also serve to increase Clientèle’s cash resources, providing the funding the company needs for the offer consideration to existing shareholders.