Dolla Financial Services Limited (DOLLA) has shown keen interest in Access Financial Limited (AFS), reports are coming out that a letter was sent to Access Financial’s board of directors which suggests a takeover bid is insights from Dolla.
These two companies complement each other being that they are in the same micro-finance industry. Given the fact that Dolla Financial has raised $4.76 billion during its JSE (Junior Stock Exchange) IPO in June of this year.
Currently, they have a lot of cash on hand to expand, as it’s clear that investors see a lot of potential in the company which is why they were able to raise that amount of money in the first place.
At the moment, information has been little regarding the deal, depending on certain deals NDA (non-disclosure agreement) has been activated between parties involved in the deal so as not to create unnecessary market activity.
In this case, it is most likely true given the nature of the deal and the sensitivity of certain information.
Despite the fact that Dolla has cash on to realistically carry out the deal along with outside partners as well which is not a far stretch in this stretch in this situation, Access Financial is also another major player in the micro-finance space.
Access Financial’s loan and advances portfolio stood at $4.65 billion at the end of June with the company netting $432 million in interest income; However, the company’s net income shrunk 13 percent to $77.56 million due to higher other operating expenses and credit loss provisions.
Dolla’s loan book expanded to $1.05 billion at the end of June with the younger firm earning $298 million in interest income and $119 million in net profit, a quintupling of the $21 million earned in the prior period.
Access Financial was also the first company to be listed on the JSE in 2009. Let’s see how the deal plays out, it would serve Dolla strategically if this deal goes through as the benefits are there.
