UNBUNDLE
1 June 2016 By PDSNETTo dispose of a subsidiary by handing the shares which the parent company holds directly to the parent company’s shareholders in proportion to their holdings. In some cases, unbundling is preferable and simpler than selling a subsidiary. On 19th November 2019, Rand Merchant Bank Holdings (RMH) announced on the Stock Exchange News Service (SENS) that it was unbundling its 34,1% holding of Firstrand (FSR) into the hands of RMB's shareholders. At the same time, Remgro (REM) announced that it was unbundling its 28,2% shareholding in RMH into the hands of Remgro's shareholders. On 1st March 2022 PSG announced that it intended to unbundle its holdings in key subsidiaries like Curro, PSG Konsult, Stadio and Zeder and then buy back PSG shares from shareholders in order to delist the company. By doing this they released approximately 38% value into the hands of shareholders. The company Zeda, which incorporates car rental companies Avis and Budget was unbundled and separately listed on the JSE of 13th December 2022. The purpose of these actions is almost always to release value into the hands of shareholders. Typically, investment holding companies like PSG, RMH and REM have traded at a significant discount to the value of their holdings - anywhere between 10% and 40%. Unbundling is a mechanism to release that value to their shareholders.
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