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SOUTH AFRICANS DIVE DEEP INTO OCEANIA

12 Jul HCI Australia

ANZ Bank has put the former Allco Equity Partners, Oceania Capital, in play by selling enough shares to South African listed conglomerate Hosken Consolidated Investments for a takeover springboard.

ANZ ended up owning 24 per cent of Oceania in late 2008 as a result of an investment company belonging to Melbourne’s Liberman family, LJCB Investments, defaulting on a loan.

At the time it was reported that ANZ needed to sell the stake for $112 million if it was to recover all the money owed by LJCB under a collapsed put and call option arrangement with Allco Finance.

Advertisement: Story continues below HCI Australian Operations revealed yesterday that it had increased its stake in Oceania from 5.24 per cent to 19.99 per cent, picking up most of the stock in a sale agreement signed off with ANZ last Friday at $2.20 a share.

Because HCI’s parent company is South African, the sale contract with ANZ includes a provision that the deal is dependent on Foreign Investment Review Board approval, although that is unlikely to be a stumbling block.

The timing of HCI’s purchase is intriguing, coming only a week before Oceania is due to vote its stock at the scheme of arrangement meetings for iSoft this Friday. With proxy voting due to close tomorrow morning, it seems unlikely that HCI will be able to influence the outcome of the $188 million iSoft merger with US-based Computer Sciences Corporation.

Still, Insider would be surprised if lawyers on all sides of the iSoft deal were not busy yesterday trying to re-assure themselves that the scheme is not about to be derailed by the South Africans.

HCI’s local office did not return Insider’s call yesterday and Oceania Capital chose to keep a low profile.

It is thought that HCI might be after Oceania’s cash and shell for a local listing.

Online Gaming Systems (Australia), which has directors and investors in common with HCI, according to Australian Securities and Investments Commission records, is one possible operation. Online Gaming Systems tried to list here once before, about a decade ago, but the deal was never completed.

Oceania’s net assets per share are estimated at $2.60 a share, assuming the iSoft deal is completed, compared with yesterday’s closing price of $2.15, which was down 8¢.

As for Hosken, it is one of the more unusual corporate animals, having started out as part of the black empowerment process in South Africa. It was the investment arm of the Clothing and Textiles Workers’ Union, which then merged with the National Union of Mineworkers.

It has an exotic collection of assets in gaming, media, food and beverage services, and even a bus service in Cape Town, all of it giving the group a market valuation of more than $1.5 billion.

Source: The age – Business DAy – Ian McIlwraith