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Share price: R215 JSE code: REM

HOLD IN­VEST­MENT COM­PANY REM­GRO looks far more in­ter­est­ing now that the mar­ket has started to reap­praise the heady val­u­a­tion stuck onto pri­vate hospi­tals sub­sidiary Medi­clinic In­ter­na­tional.

With Medi­clinic less dom­i­nant in the in­trin­sic value cal­cu­la­tion, in­vestors can more fully ap­pre­ci­ate the rest of Rem­gro’s port­fo­lio. There are solid, long-term po­si­tions in listed and un­listed com­pa­nies (con­sumer-driven RCL Foods, Dis­tell and Unilever SA), as well as fi­nan­cial ser­vices (RMB/FirstRand and RMI), and in­trigu­ing smaller in­vest­ments such as Grindrod, Dark Fi­bre Africa, Air Prod­ucts, To­tal SA and In­ven­fin.

The port­fo­lio bal­ance could also change now that the com­pany has reinvigorated its bal­ance sheet through a size­able rights issue. It seems likely Rem­gro’s next bold move will in­volve buy­ing out all or part of SABMiller’s 29% stake in liquor gi­ant Dis­tell, which looks in­tent on build­ing a global reach in ciders, wines and cer­tain spir­its.

There may be an op­por­tu­nity for Rem­gro do to some house­keep­ing — per­haps buy­ing out mi­nor­ity share­hold­ers in RCL Foods or Grindrod. The hitch is that the dis­count the share price offers on the port­fo­lio value is not as wide as in past years. Maybe per­cep­tions have changed now that Rem­gro is look­ing more ad­ven­tur­ous on the deal-mak­ing front.

But cur­rent mar­ket con­di­tions, as well as com­pli­ca­tions with Medi­clinic’s re­cent cor­po­rate ac­tiv­i­ties, may yet see the dis­count widen to more com­pelling ranges.

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