Insight
October 21, 2026
Sanlam’s proposed R505-per-share buyout would end the minority shareholders’ direct investment in Santam. For those who consider the price inadequate or wish to remain invested, the scheme of arrangement makes the voting process and statutory remedies particularly significant.
The proposal would make Santam wholly owned within the Sanlam Group and lead to the termination of its separate stock exchange listings. If the scheme becomes operative, it can bind shareholders who voted against it, subject to the protections available under the Companies Act 71 of 2008.
Assessing the offer price
The proposed price represents a 26.6% premium to Santam’s closing share price on 2 October 2026 and a 28.6% premium to its 90-day volume-weighted average price. Shareholders must consider those premiums alongside the value of the investment they would surrender, including Santam’s earnings prospects, capital position and future growth opportunities.
Santam’s independent board has appointed Rand Merchant Bank as the independent expert to assess whether the transaction terms are fair and reasonable. The board has indicated its support for the scheme. The expert’s report and the board’s recommendation are expected to accompany the combined offer circular, which the announcement envisages being posted on or about 3 November 2026.
Voting and appraisal rights
The scheme requires approval by at least 75% of the eligible voting rights exercised at the meeting, subject to the applicable quorum and statutory requirements. Sanlam’s controlling stake cannot be used to supply that approval. Once operative, the scheme can bind dissenting shareholders, subject to their statutory rights.
Section 164 of the Companies Act 71 of 2008 allows a qualifying dissenting shareholder to demand payment by the company of the fair value of their shares. Ordinarily, the shareholder must give written notice of objection before the vote, vote against the resolution and deliver a compliant demand within the prescribed period. Simply voting against the proposal is insufficient.
The fair value enquiry is separate from the offer price, and does not guarantee a higher payment. If the company’s offer is inadequate, or it fails to make the required offer, the shareholder can seek a court determination under the Act. Fair value is assessed immediately before the resolution giving rise to the appraisal rights was adopted.
The Santam proposal also includes a condition addressing appraisal demands exceeding 3% of the eligible shares. Its operation depends on the specified objection and demand procedures, and the condition only fails once Sanlam gives the required written notice. Sanlam can waive it. This is a contractual protection for the buyer; it does not cap shareholders’ statutory appraisal rights.
Court protection after the vote
Section 115 provides a separate route to court scrutiny. Where at least 15% of the voting rights exercised oppose the resolution, a shareholder who voted against it can, within five business days after the vote, require the company to seek court approval. The company must then apply for approval at its expense or treat the resolution as a nullity.
A dissenting shareholder can also apply within ten business days after the vote for leave to seek a judicial review, subject to the statutory requirements. The grounds for setting aside the resolution include manifest unfairness to a class of shareholders and material defects in the voting process, such as conflicts of interest or inadequate disclosure.
Shareholders considering opposition should therefore review the circular and obtain advice before the meeting. The notice requirements, voting instructions and time limits determine whether particular remedies remain available. By the time the scheme is implemented, the opportunity to preserve those rights may already have passed.
This article provides general information and does not constitute legal, financial or investment advice. The proposed transaction remains subject to shareholder and regulatory approvals and other conditions.
