It was bound to happen. A re-visitation of BEE deals as soon the rumour of "once empowered, always empowered" hit the headlines. We speculated about this in our Standard Bank post on the 6th of November. Many deals hide behind liberal rhetoric of wanting to empower the masses etc, but these platitudes are more often than not a thin disguise for a BEE deal that will impress government. Lock-in clauses are a perfect application of this principle - the deal is only worth something if the black shareholders remain shareholders for as long as possible. Great for the company, not so good for the shareholder. Can you imagine buying a house and the bank informs you that you may not sell the house for 20 years, or until the bond is fully paid off.
Fin24 posted a story on their website this morning that contemplates about how the "once empowered, always empowered" rule will impact on the two Naspers deals. They suggest that it is possible that the sale-to-black-people-only condition will be removed if the rule does form part of the codes.
I love this principle - it works for all parties concerned.
By the way - both schemes attracted an incredible amount of interest. The Welkom Yizani (Media 24) share offer was more than 200% oversubscribed by black individual applicants alone, and the Phuthuma Nathi (Multichoice) share offer was 190% oversubscribed.
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