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Harvard dealmakers ‘seize power’ in Wilderness deal

MBONGENI MGUNI
One of Wilderness' campus in the Delta PIC: WILDERNESS-SAFARIS.COM
Mike and Nick Stone, two Harvard trained asset managers with track records involving billions of US dollars in private equity deals, will occupy the centre of power in Wilderness Holdings once shareholders approve the multi-million Pula buy-out offer unveiled this week.

Wilderness is one of Africa’s biggest ecotourism groups, with 16 camps in the Okavango Delta either wholly or partially owned. The group dominates the Delta’s high end with camps that have won international awards.

Shareholders holding nearly 87 million shares or about 36% will soon be asked to vote on the P6.25 per share African Wildlife Holdings Limited is offering for their shares. If the offer is successful, Wilderness Holdings will exit the BSE after nine years of listing and go private.

The deal is as good as done. African Wildlife Holdings already has irrevocable commitments to vote in favour of the proposal from shareholders holding a combined 61.9% of the shares.

The question for the shareholders on the ‘outside’ is whether they will put faith in the new power structure or opt out at what Wilderness says is a premium, when compared to the level at which the shares have been trading recently.

The answer to that question depends on understanding who the faces are in the Wilderness’ new centre of power. African Wildlife Holdings is a partnership between African Wildlife Holdings Limited, veteran Wilderness CEO, Keith Vincent and Cork Bush Proprietary Limited.

This is where Mike and Nick come in. The two, who are not related, were appointed Wilderness directors last July, when their sponsored entity African Wilderness Holdings Limited burst onto the share registry, taking up 60.2 million or 25% in equity.

In their San Diego, California private equity firm, FS Investors, the Harvard-educated directors have track records involving the management of billions of US dollars. FS Investors is believed to be the capital behind African Wildlife Holdings Limited.

The Stones’ strengthened position at Wilderness however comes from the fact that both have involvement in the management of another major Wilderness investor, the Rise Fund.

The Rise Fund, which holds 33.9% of Wilderness’ shares taken up at the same time as African Wildlife Holdings in July last year, features a board with philanthropic celebrities such as Richard Branson, rock star Bono, Mo Ibrahim and others.

Mike Stone was the Rise Fund’s chief investment officer last July, but is

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also referred to as a senior adviser and partner of TPG, one of the world’s largest private equity firms with US$70 billion in assets under management.

At Cork Bush, the other partner in the takeover bid, Vincent and Nick Stone again feature.

“Cork Bush is a Botswana company owned by existing Wilderness directors, Keith Vincent and Nick Stone, and controlled by Nick Stone,” Wilderness commercial director, Derek de la Harpe said yesterday in response to Mmegi enquiries.

“African Wildlife Holdings is managed by Vincent, an 18 year Botswana resident and Nick Stone.” Company registration records indicate that Cork Bush was established in 2016 as a shelf company, before Vincent took over, selling a stake to Stone in September last year for US$6,000. The Stones’ manage huge portfolios, part of which they are apparently using to take up stronger positions in Wilderness.

According to the proposal before shareholders, African Wildlife Holdings only needs to secure 35.1% of shares and it can proceed with the delisting.

“That should be quite easy as African Wildlife Holdings already holds 25.3% of Wilderness’ shares and has commitments for support from most of the other shareholders.

“One of the major issue many shareholders will want to know are the faces behind the new capital coming into Wilderness, the people behind the private equity being managed.

“That will determine whether they want to hang around or get out at a premium,” a local market analyst said.

The analyst said Vincent’s presence in the deal would be a comfort to those shareholders planning to stay on after the delisting. One of the shareholders facing the difficult decision is the Botswana Public Officers Pension Fund which holds a 4.5% interest in Wilderness.

“Wilderness will continue its normal day to day operations as the leading ecotourism company in Botswana without any effect,” de la Harpe said.

“No one is being required to sell in this offer and all Batswana who would like to remain as shareholders in the company are naturally welcome to stay on.

“This is merely an option for them to receive a significant premium for their stock.”



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