PIC paid premium for Distell stake

Ten months after the Public Investment Corporation was identified as the buyer of AnheuserBusch InBev’s 26.5% stake in Distell, it has emerged the price for the stake was a hefty R170 a share.

Ten months after the Public Investment Corporation (PIC) was identified as the buyer of Anheuser-Busch InBev’s 26.5% stake in Distell it has emerged that the price for the stake was a hefty R170 a share.

On Friday afternoon, a trade of 58.7-million Distell shares was put through the market at R170 each with a total price tag of just under R10bn.

Distell was unable to respond to queries about the parties to the transaction, but one analyst said that given the volumes involved it could only have been the PIC deal that had been agreed in December 2016.

The 58.7-million shares represents just over 26% of Distell’s shares in issue.

Friday’s book-over confirms market speculation that PIC had paid a premium to the ruling share price in order to secure the stake.

Although Distell did touch R171 in October 2016 and had been on an upward trend since May, the mid-October price represented a 12-month peak. It has been on a steadily declining course for much of the past year. On Friday, the share closed firmer at R129.86.

Remgro, which had a preemptive right to the shares, had been the expected buyer of the 26.5% stake.

These expectations firmed in September 2016 when Remgro announced plans for a R9.3bn rights issue. This would have funded a purchase priced at about R150 a share.

Analysts assumed, when the PIC emerged as the buyer, that Remgro was not prepared to get dragged into a bidding war.

At the time Opportune Investments CEO Chris Logan said he was disappointed Remgro had not acquired the stake.

Since the Distell control structure had been put in place in the early ’70s, with Remgro, KWV and South African Breweries holding equal stakes, there had been little incentive for the major shareholders to back any significant capital expenditure.