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INTRIGUING CAPE BEE DEALS

01 Mar General

CAPE-based BEE contenders have started 2012 with a flourish with a number of intriguing deals both proposed and clinched.

The biggest surprise was Brimstone’s endeavours in doubling their stake in Tiger Brands controlled fishing company Oceana Group.

Most observers might have bet on Brimstone, already a small empowerment participant at Tiger Brands, building its fishing empire around its existing controlling shareholding in hake specialist Sea Harvest.

While Brimstone has long held a significant minority stake in Oceana (harking back to its late nineties listing on the JSE), few would have thought the empowerment company would be able to net a bigger stake.

It seems, though, Investec Asset Management was a keen seller of its stake in Oceana, and Brimstone was more than happy to step up to the plate.

The big question now is whether Brimstone will look to build an even bigger stake in Oceana – remembering that Sea Harvest might fit snugly into the more diversified and financially muscular Oceana fishing empire (which does not have the largest hake quota in the SA by a long shot).

Another surprising development saw KK Kombi’s empowerment vehicle Thembeka swopping its stake in PSG (which itself is a major shareholder in Thembeka) for a stake in industrial conglomerate Steinhoff International.

But Steinhoff is taking a 20% position in PSG, which means Thembeka will still have some exposure to the innovative Stellenbosch investment company.

Also bound to raise a few eyebrows was news that Cape Empowerment is set to list its own property investment company on the JSE under the Ascension property banner.

Cape Empowerment, which is set to develop the Lions Hill property just outside central Cape Town, is apparently looking at a property portfolio worth some R1 billion.

Ironically, Cape Empowerment – when under debt stress a few years ago – sold out its listed property interests in Ambit.

Two of the less surprising developments included Sekunjalo and Hosken Consolidated Investments.

HCI made a pitch to buy out all minority shareholders in KWV Holdings – the Paarl-based liquor company in which it already holds a 35% stake.

Liquor industry insiders predicted such a development when HCI bought PSG and Rootstock’s stakes in KWV late in 2010. But HCI – which are offering 890/share to minorities – may not find too many takers at the price, which discounts the company’s underlying value (underpinned by cash, Winelands properties and legacy assets) by more than 50%.

Another ‘largely expected’ development saw Sekunjalo emerge as one of the participants in Pioneer Foods second phase empowerment deal.

Sekunjalo has enjoyed long-standing links with Pioneer.

Sekunjalo chairman Iqbal Surve has served on the Pioneer board for years, and readers might remember that Sekunjalo subsidiary Premier Fishing sold its fish paste brands (Redro and Pecks) to Pioneer Foods a number of years ago.

Source: Cape Business News