Prudential Financial Agrees $185 Million Exit From South Africa’s Alexforbes

Prudential Financial has agreed to exit its entire 34.39% holding in South African financial-services group Alexforbes through two separate share sales valued at about $185 million in aggregate. Its 99%-owned indirect subsidiary New Veld LLC will sell most of the stake back to Alexforbes, while ARC AF Holdings will acquire the remainder.

The Newark-based insurer said Friday that the sales are expected to close in the first half of 2027, subject to Alexforbes shareholder approval for the company repurchase, applicable regulatory clearances and other closing conditions. Prudential said the exit advances a strategy announced in August to narrow its geographic footprint by leaving emerging markets and concentrating resources on businesses and regions where it sees stronger long-term opportunities.

New Veld currently owns 446,847,621 Alexforbes shares. Under the agreements, Alexforbes will repurchase 372,773,547 shares, equal to about 28.69% of its issued ordinary share capital, and ARC AF Holdings will separately buy New Veld’s remaining 74,074,074 shares, representing about 5.7% of the shares currently in issue.

Alexforbes will buy back most of Prudential’s holding

Alexforbes disclosed a repurchase price of R6.75 for each of the 372.8 million shares it plans to buy from New Veld. That implies a base consideration of about R2.52 billion before the adjustments specified in the agreement. The company said R6.75 represented a 3.4% discount to the 30-business-day volume-weighted average price of its shares as of September 16, the trading day before the agreement was signed.

The final amount payable for the repurchase can change before closing. Alexforbes said the aggregate repurchase price will increase at an annual rate of 8.4%, compounded monthly in arrears, from the last dividend payment date before signing until the closing date. The amount will also be reduced for distributions received by New Veld during that period and for certain commitment fees connected with the financing, capped at R12 million.

Prudential’s approximately $185 million figure covers both parts of its exit in aggregate. Alexforbes disclosed the R6.75 price for the company repurchase, but its September 18 announcement did not separately state the purchase price ARC AF Holdings will pay for the remaining 74.1 million shares. Keeping those figures separate avoids treating the disclosed buyback price as a confirmed price for the ARC sale.

Once the company repurchase is completed, the 372.8 million shares are due to be cancelled and delisted. Alexforbes said that would reduce its issued share count to 926,734,825. The shrinking share base is an important part of the economics for investors who remain, because their proportional ownership rises even though they are not receiving new shares.

The repurchase adds debt while ARC’s ownership rises

Alexforbes plans to fund its repurchase with a mix of available cash and external borrowing. Its filing said the repurchase would reduce group cash resources by about R540 million and increase long-term liabilities by R2.1 billion. The associated long-term financing is expected to add roughly R145 million a year in pre-tax finance charges for as long as that funding remains outstanding.

The company also expects the repurchase to reduce share capital and reserves by about R2.6 billion under the applicable accounting treatment. Alexforbes said it would remain adequately capitalised after completion, and its board, excluding directors nominated by New Veld, expects the repurchase to be earnings and value accretive for the remaining shareholders. Those accretion statements are management’s expectations rather than completed financial results.

ARC AF Holdings’ position would become substantially larger if both parts of Prudential’s exit are completed. Alexforbes said ARC AF Holdings would own 77.94% of the company after the repurchase, cancellation of the bought-back shares and ARC’s purchase of New Veld’s remaining holding. The increase reflects both the additional 74.1 million shares ARC is buying directly and the lower number of Alexforbes shares outstanding after the repurchase.

The filing also sets out the ownership outcomes if only one leg closes. If the Alexforbes repurchase is completed but ARC does not buy New Veld’s remaining shares, ARC AF Holdings would hold 69.95% and New Veld would retain 7.99%. If the ARC purchase closes without the repurchase, ARC AF Holdings would own 55.59% of the shares in issue.

Shareholder approval remains a material step. ARC AF Holdings has given Alexforbes an irrevocable undertaking to vote 581,722,888 shares, or 44.76% of the current issued shares, in favor of the company repurchase. New Veld has also undertaken to support resolutions required under South Africa’s Companies Act, although it is excluded from voting on the ordinary resolution required under the JSE Listings Requirements for the related-party repurchase.

Prudential reverses the direction of its 2022 Africa investment

The planned exit marks a change from the rationale Prudential gave when it entered Alexforbes in 2022. In March of that year, Prudential and LeapFrog Investments announced an agreement for New Veld to acquire 200.8 million Alexforbes shares from Mercer, equal to 14.83% of the company at the time. Prudential described Africa then as a strategically important growth market and said the investment would broaden its presence on the continent.

New Veld subsequently expanded its position, and Alexforbes’ latest disclosure puts the holding at 446.8 million shares, or 34.39%. Four years after the initial agreement, Prudential is now presenting the sale as part of a wider decision to exit emerging markets and simplify its international footprint. The insurer said it will continue supporting Alexforbes and its stakeholders until closing and that New Veld’s involvement will not change before completion.

The exit is occurring while Alexforbes continues to report growth in its underlying business. For the year ended March 31, 2026, the company reported that assets under management and administration increased 22% to R733 billion, while normalised profit rose 22%. Annualised institutional new-business revenue increased 27% to R184 million, and retail new-business flows rose 39% to R36.5 billion.

The ownership change also carries board consequences. Alexforbes said New Veld nominees Gary Herbert and Amy Tedesco will resign as non-executive directors when the company repurchase closes, with Herbert also leaving the remuneration committee. Alexforbes plans to distribute a shareholder circular with full details of the repurchase and the resolutions needed for approval, followed by an announcement setting the dates and times for the general meeting.

Prudential expects the two sales to close during the first half of 2027. Until the shareholder vote, regulatory approvals and other conditions are satisfied, New Veld remains the holder of its Alexforbes shares and the planned exit is not complete.