HOW IT WORKS – Unbundling
HOW IT WORKS:
What is unbundling?
- A transaction process where shares
- of one company (unbundled company)
- are distributed by another company (unbundling company)
- to the unbundling company’s shareholders
NOTE: This process will help separate the income from each branch and allow the business to focus on the core.
What can a company sell during the unbundling?
- Product lines
Reasons why a company would unbundle?
- To create a better performing company or companies
- To offer a new variety of products or services
- To raise capital
- Distribute cash to its shareholders
- Cut down on costs
- Sell off non-essential parts of the company to optimise their main operations
- The BOD or company managers believe it will improve its current performance
- Expand options for their consumers
- To reach new consumers
Remgro, the listed investment holding company – chaired by Johann Rupert – Is going ahead with the unbundling agreement.
Remgro will unbundle its (28.2% ownership) and shares in Rand Merchant Bank Holdings (RMH) to its shareholders.
They will however, will hold on to its stake in FirstRand. Their biggest investment is 34% in FirstRand. It also owns 3.9% direct interest in the banking group, which it will keep.
Once this happens, then the shareholders will hold a direct portion in the RMH company.
With the transaction, each Remgro shareholder will receive 0.699 RMB shares for every 1 Remgro share they own.
So far, the effective date of the adjustment took place on Tuesday, 3 June 2020.
Trade well and look after yourself,
Founder, MATI Trader
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