Brian Joffe’s investment group, Long4Life, says it spent R122m of its
cash pile on buying back its own shares because the stock had become
cheap.
Long4Life said
it had bought back 3% of its issued share capital. It
paid an average price of R4.39 for the shares, which it sold during its
initial public offering in April 2017, raising R2bn.
Joffe told investors in October that buying back stock did not make
sense and that the group was still looking for acquisitions as it was
“only about half invested”.
But senior executive Brad Webber said last week the group’s share
decline meant buybacks had become attractive. The share price fell
below R4.50 after reaching a high of R6.40 in March.
“It’s not to say that we haven’t got enough projects on the table to
go and invest in, but the share price just got to a level over the past
two weeks or so that it just made complete sense,” Webber said.
Long4Life would use some of the shares for its forfeitable share plan, he said.
Since listing, Long4Life has spent R3.4bn on deals. Its acquisitions
include Holdsport’s Sportsmans Warehouse, Outdoor Warehouse and
Performance Brands, as well as Sorbet, Inhle Beverages and Chill
Beverages.
Joffe said in October valuations of target companies remained steep.
The company had net cash on its books of R929m at the end of August,
as well as unused debt facilities. Joffe said at the time there was "no
merit" in funding deals with equity because the group was trading at a
discount to net asset value of over 20%.
- Businesslive SA
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