Close

Not a member yet? Register now and get started.

lock and key

Sign in to your account.

Account Login

Forgot your password?

STOCK TALK: SABMILLER’S CAT OUT OF BAG

EVER since SAB moved its primary listing to London, there was speculation about the disposal of Tsogo Sun.

Speculation continued despite constant denial of any plan.

Eventually, a few months ago, SABMiller said it was reviewing strategic options for its 39.6% Tsogo stake, which is valued at about R11bn. Speculation now is that a deal will be announced “within days”.

It will have to be an extremely clever deal to satisfy all parties involved, particularly HCI, which has a 41% stake in Tsogo.

HCI boss Johnny Copelyn has said HCI doesn’t have the money to buy SABMiller’s stake.

This rules out any sort of control premium for SABMiller, which — given that it had only de jure joint control — was probably never on the cards anyway.

An unbundling would be suboptimal and messy. So an organised sell-off through a book-building exercise, with HCI’s enthusiastic backing as lead shareholder, is the most likely scenario and will improve the share’s liquidity.

HCI may want to increase its stake to below 50%, and given regulations, individual institutional shareholders will need to keep their holding below the 5%.

The shift from de jure joint control to sole control will necessitate notifying competition authorities.

Source: Business Times – Ann Crotty