A steal for Stel­lar?

Financial Mail - Investors Monthly - - Opening Bell -

Ac­quis­i­tive in­dus­trial con­glom­er­ate Torre had, at the time of writ­ing, fallen to lev­els around half of its 510c 12-month high in July 2015.

Torre has made some in­spired ac­qui­si­tions and ac­cu­mu­lated a vi­brant hub of di­verse in­dus­trial oper­a­tions. How­ever, it’s a tough slog for any in­dus­trial com­pany linked to the stag­nant lo­cal econ­omy, and lower prof­its at Torre are un­avoid­able.

But the down­swing in sen­ti­ment for Torre does open a door for re­cently formed in­vest­ment com­pany Stel­lar Cap­i­tal Part­ners (SCP), which al­ready owns close to 35% of Torre, to make a move on its in­dus­trial as­so­ciate. An of­fer by SCP to Torre mi­nori­ties — es­pe­cially a deal that in­cludes a scrip op­tion — is likely to be wel­comed, as share­hold­ers might pre­fer to switch from a pure in­dus­trial play to a more di­ver­si­fied counter with a sub­stan­tial war chest.

Of course, pric­ing the buy­out pitch is not go­ing to be easy — not only be­cause Torre’s prospects look a lit­tle rusty but also be­cause SCP, which is in the throes of woo­ing as­set man­ager Pre­scient, is in a phase of rapid trans­for­ma­tion.

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