FBC Securities this week advised shareholders at leisure chain African Sun to accept a US$5,17 per share cash offer as the hospitality group moves to voluntarily delist from the Victoria Falls Stock Exchange (VFEX), citing the opportunity for investors to unlock immediate liquidity in an otherwise illiquid market.
The brokerage said the offer presents a significant premium to recent trading prices and provides shareholders with a practical exit from a market where trading volumes have remained consistently thin.
African Sun last week announced plans to buy back up to 40% of its issued shares at US$5,17 each. The price represents more than a 30% premium to the company’s market price of US$3,9150 per share as of Monday.
The offer will open on March 19 and close on April 9, subject to shareholder approval at an extraordinary general meeting scheduled for March 18. If approved, the company’s delisting from VFEX is expected to take effect on April 20.
In an investment note, FBC Securities said the offer represented a 30% to 34% premium to recent volume weighted average prices.
However, the price is about 22% below the company’s June 2025 net asset value (NAV) of US$6,60 per share.
“We recommend that shareholders accept the offer,” FBC said. “This recommendation is based on the fact that the offer provides immediate cash liquidity at a price materially above what the VFEX has delivered through normal trading, where thin volumes have consistently prevented fair price discovery.”
The brokerage said an independent financial adviser had also concluded that the offer was fair and reasonable to minority shareholders, based on a multi-method valuation analysis.
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Investors who decline the offer would remain shareholders in an unlisted company, potentially facing limited opportunities to trade their shares.
“Shareholders who do not accept will retain shares in an unlisted company with no guaranteed secondary market liquidity, notwithstanding the company’s intention to explore over-the-counter arrangements,” FBC said.
Although the offer is below the company’s net asset value, analysts argue that the discount should be viewed within the context of the limited liquidity that has characterised trading in the stock.
African Sun said the US$5,17 offer price should be assessed against historical market performance rather than asset valuations alone.
“The offer represents a substantial premium to all relevant historical trading levels,” the company said. “For shareholders who have experienced the challenge of a relatively illiquid market, this premium offers a tangible and immediate realisation of value that the market itself has been unable to provide.”
The hospitality group acknowledged that the offer price reflects a discount to NAV, but said this is largely because the NAV figure reflects the accounting value of its hotel properties based on periodic revaluations rather than assets that can be readily converted into cash.
Trading in African Sun shares has remained subdued, with daily volumes often limited to a few hundred or thousand shares and many trading sessions recording no transactions.
