Curro (JSE: COH): The R7.2bn Buyout and Nonprofit Pivot

0:00 Welcome back to the Money Mice, the podcast for South African retail investors who want to stop feeling like they're drowning in jargon and actually start navigating the market like someone who knows what they're doing. I'm your host, Jay. And today, instead of our usual jargon busting superhero programming, weak tackling a buyer that's got more drama than a grade 9 breakup behind the bike shed Curro Holdings. Yep, the private school empire that convinced parents to remortgage their houses for after school fees. They've just been slapped with a 7.2 billion buy out from the Yanni mutton startle and if the steel passes, Kira will delist from the JSE faster than your colleague bolts for the parking lot on a payday Friday.

0:41 So let's look at the headline numbers. The offer is 13 Rand per share. That's an 8% premium on Kiros close today, which was 12 and four cents. Still though, it's approximately 53% premium on the 30 day volume weighted average price of a train 52. It's no wonder Kilo's price shot up like a learner getting the word surprise of his day. It spiked more than the Josie taxi fare in December. So the deal structure, well, it's a cash and shares combo meal.

1:11 It's not as straight ETF into your Capitec account. It's more like a spur combo platter. You're getting a bit of everything whether you ordered it or not. So the offer consists of an $0.86 per share cache. So basically a small packet of chips in the kiddies meal. Then you'll get Capitec shares. You'll get 0.002, 84 Capitec shares per kilo share. That's still the full-sized stake.

1:37 Most of the deal value PSG Financial Services shares, which is 0.07617 per kilo share. We'll call it the side salad you didn't really want, but it comes with a combo anyway. So instead of KIRO shares, you'll leave the table holding Capitec and PSG. It's like going to Nando's, altering 1/4 chicken and getting handed sushi and a samosa.

2:02 Bad, but not exactly what you planned for. And the people behind this is basically the Yamin Eton Stratton, which is a public benefit organisation linked to the border. Buffett himself, Yani Mutton, the oak behind Kapidex Rise and Psg's fingerprints on half the market. JM Surrey has a small slice of cura. Now they want the whole pie. This is a hedge fund raiding your tuck shop money.

2:27 It's like you're rich oppa buying the whole school and saying returning this into a charity but don't worry the uniforms are still compulsory so what's this non profit pivot all about? Kira isn't becoming a charity case, it's still going to run like a proper school business but profit gets ploughed back into it to build new schools, upgrading facilities and provide bursaries for kids with parents. Can't afford the school blazer. Think of it as taking the class bully and making him the whole monitor.

2:54 He's still bossing people around but at least now it's for the greater good. So why now? Kiros 2025 report card was more could do better than Honor's role. Earnings were flat, learner numbers were down 1.4% to just under 72,000 and a 74,000,000 impairment dragging things down. But revenue was up 4.7% thanks to a fees hike. So curious like the kiddo failed maths, scraped by an English but got full marks in woodwork.

3:23 Not perfect but still good enough to get his mom to brag at the Bri. And the strategic player is non profit equals note dividends. Every cent gets reinvested into expansion. Chemist gets a nice legacy Project S Africa's biggest school network was a social impact Halo Retail investors gets cashed out and handed Capitec and PSG instead. It's basically like sending your spot in the school play Fort at tuck shop voucher like now.

3:52 But you might miss out on the applause later. So let's look at the approvals and timeline. The deal still needs to have shareholder approval, Competition Commission blessing and a court sign off. Target closing date is the end of 2025 or early 2026. With that 8% premium on the table, expect shareholders to vote yes. Quicker than the kids lining up for pre spur burger voucher. So what's the market implications on this one? It's another delisting.

4:20 The Jays is bleeding listings faster than a guy brewing without tongs. Curo leaves and South African retail investors lose one of the few education plays left onto JC sooner. JC is going to look like your granny's fridge, half empty and filled with stuff. Know what he wants? That margarine tub of Alt Atchar. Now let's look at the winners and losers. Winners.

4:41 Well, shareholders who bought under 9 Rand. They came out like kids selling fizzy pops outside the exam hall. JMS who gets to grow Curo with lace market noise. The losers? Well, long term retail investors who believed in the education growth story and the JSE who just lost another fee contributor. So let's look at your stockpile Starter pack for this edition. Offer is 13 Rand per se, which equals about 7.2 billion Rand. Structure is 6.6% cash, roughly 80% capitec and 14% PSG premium. Well net 60% above the close of yesterday, 8% above today's close outcome.

5:22 Kerrod lists cause non profit and reinvests all the profits. Timeline will end 2025 or early 2026 pending approvals. Market reaction As soon as they made the announcement, share price jumped about 52%. Procuro buy out is like being told the school's out early you stoke but then you realise you've just missed the end of year party.

5:45 And while my jokes may be more dead than actual dad jokes, remember this is not financial advice. Please do your own research and speak to a licensed advisor. Catch you on the next episode. Same time, same place, and same sarcasm.