Jens Montanana, the founder and long-standing chief executive of Johannesburg-based information technology group Datatec Ltd, has increased his holding in the company to just above 20% after the firm issued new shares under a special dividend scrip option.
What happened
Datatec announced that, as part of a special dividend package totalling R7.05 billion, most qualifying shareholders chose to receive new shares instead of cash. The company issued 94.3 million fresh shares, representing about R4.78 billion at the scrip price, while eligible shareholders who elected cash received roughly R2.28 billion in total.
The new shares were priced at R50.63 each — based on the 30-day average share price to 5 October, less the R29 dividend — and the issuance increased Datatec’s total shares outstanding by almost 39% to about 337.6 million.
How the move affected Montanana’s holding
Montanana held 44.9 million Datatec shares (about 19%) at the end of February, according to the company. Since then he received roughly 1.6 million shares from a staff incentive plan in June and a further 1.1 million through a smaller scrip dividend in July, while selling 180,000 shares in August.
Under a facility arrangement laid out in the dividend circular, Datatec was required, where legally possible, to ensure Montanana took new shares for about 90% of his holding. Using the scrip ratio published by the company — 57.28 new shares for every 100 held — a 90% election would have delivered roughly 24.5 million new shares to Montanana, lifting his stake to an estimated 72 million shares, or about 21% of the enlarged share base.
At the close of trading on the day the company reported the outcome, the stock was quoted at R56.05, which would value that stake at about R4 billion. Datatec said it will disclose the exact number of new shares allotted to directors on Wednesday.
Market reaction and company outlook
Datatec’s shares rose on the news, trading up 5.2% to R58.96 in Johannesburg on Tuesday afternoon after the scrip election results were announced. The scrip option increased the company’s equity base while conserving cash that would otherwise have been paid out.
| Item | Figure |
|---|---|
| Special dividend (total) | R7.05 billion |
| New shares issued | 94.3 million (worth R4.78bn) |
| Cash taken by shareholders | R2.28 billion |
| Enlarged shares outstanding | ~337.6 million |
| New share price (scrip) | R50.63 |
- Capital structure: The scrip election meaningfully expanded the equity base instead of reducing cash reserves.
- Control and ownership: Montanana’s stake moving above 20% reinforces his position as the largest individual shareholder and central figure in Datatec’s corporate governance.
- Liquidity and valuation: Market response pushed the share price higher on the day, increasing the market value of major holdings that did not take cash.
Datatec also noted certain governance and employee arrangements influenced the allocation: its chief financial officer and company secretary were required to take shares for stock held in escrow under the group’s deferred bonus plan. The company added it would disclose the exact number of new shares allotted to directors in the coming disclosure.
Why this matters to South Africans tracking the tech sector
Large scrip dividends are a tool companies use to preserve cash while rewarding shareholders; in this case it has altered the ownership profile of a prominent Johannesburg-listed technology group. For investors and market observers, the change raises questions about voting power, future capital-raising flexibility and the impact of a larger share count on per-share metrics. For employees and smaller shareholders who accepted stock, the move converts short-term cash into longer-term equity exposure to Datatec’s performance.
Datatec’s management has signalled upbeat expectations for earnings in recent commentary, and the market’s positive reaction suggests investors interpreted the scrip election and balance-sheet effect favourably. The company will provide further detail on director allocations in its next filing.
