Patrice Motsepe’s ARC Investments to re-domicile to South Africa after buyout

Key Points

• ARC Investments plans to buy out remaining shares, delist from JSE and A2X, and re-domicile to South Africa to streamline operations.
• The R9.75 ($0.538) per share buyout offers a 12.6% premium but is 22.8% below ARC Investments’ net asset value, sparking shareholder concerns.
• ARC SPV, controlling 48.82% of ARC Investments, has secured funding for the buyout, with final approvals expected by mid-2025.

African Rainbow Capital Investments (ARC Investments), the investment holding company led by South African billionaire Patrice Motsepe, is making a major strategic shift. The company has announced plans to buy out all remaining shares, delist from the Johannesburg Stock Exchange (JSE) and A2X Markets, and re-domicile to South Africa. The move is aimed at consolidating control, unlocking shareholder value, and streamlining operations.

ARC offers 12.6 percent premium for ARCI

ARC and its special-purpose vehicle (ARC SPV) have proposed a R9.75 ($0.538) per share buyout for all outstanding ARC Investments (ARCI) shares. The offer represents a 12.6 percent premium over the last closing price of R8.66 ($0.478) and a 21 percent premium over the 30-day volume-weighted average price (VWAP) of R8.06 ($0.44). However, it falls 22.8 percent below ARCI’s net asset value (NAV), raising concerns about whether shareholders are getting fair compensation.

Regulatory and shareholder approvals will determine the deal’s fate. If cleared, ARCI will delist and become fully registered in South Africa. ARC has pointed to a low public float, limited foreign investment, and tax inefficiencies in Mauritius as key reasons for the shift. The goal is to increase value realization, tighten governance, and better align operations with ARC’s South African investments.

Shareholding, funding, and what comes next

ARC SPV currently holds 48.82 percent of ARCI, while Motsepe’s Ubuntu-Botho Investments (UBI) indirectly controls 60.51 percent. After the buyout, UBI will maintain its stake, ensuring continued leadership and strategic direction.

ARC SPV and ARC have confirmed they have sufficient funding in place, eliminating financing risks. Since UBI will retain control, no merger approvals are required. Shareholders will vote on the delisting and re-domiciliation, following both Mauritian and South African regulations. BDO Corporate Finance has been appointed to provide an independent fairness opinion, and final approvals are expected by mid-2025.

If the deal goes through, ARC will fully transition to South Africa, simplifying its governance structure and reducing offshore complexities. Investors will have two choices—accept the premium offer or hold on for potential long-term gains in a privately held ARC. However, the 22.8 percent discount to NAV remains a sticking point for some shareholders, making this a pivotal moment in ARC’s evolution.

ARC’s growth and Motsepe’s bigger vision

ARC was founded in 2015 as a subsidiary of Ubuntu-Botho Investments, which Motsepe established in 2004 to expand Black-controlled capital in South Africa. The firm has steadily grown its portfolio, reporting a 4.1 percent increase in intrinsic net asset value (INAV) to R19.39 billion ($1.04 billion) for the six months ended December 2024.

With this latest move, ARC is reinforcing its focus on financial services, fintech, and diversified industries while ensuring long-term sustainability. The next few months will be critical as shareholders, regulators, and market watchers assess the deal’s impact. Motsepe’s strategy has always been about long-term value creation—whether investors see this as a step forward or a missed opportunity remains to be seen.