Joffe’s last hurrah

With the Bidvest Group having restructured itself into three separate entities, founder Brian Joffe has largely fulfilled his stated ambition of positioning the food service, renamed Bidcorp, for its next growth phase.

The last major corporate activity remaining before the executive chairman retires into the sunset is now to list Bidcorp on a major international bourse, where he hopes it will find more fertile ground for expansion.

Five years ago, after Bidvest received and turned down unsolicited offers to buy its food service division, it said it would explore alternatives for itself to pursue the next phase for the unit. It mentioned and investigated several options, including listing the unit on a major bourse like the Hong Kong or London stock exchange, but instead opted to split it from the group.

Investors in the group are smiling all the way to the bank. And prospects seem a lot brighter ahead of any offshore listing, which would provide a new, wider pool of deep-pocketed investors.

After the one-for-one split, the combined entity is now worth north of R413/share, or R138bn in market capitalisation — a record.

Joffe himself, together with all senior executives and employees who are part of the group’s share incentive schemes, are richer for it. Over 93% of the investors who approved the unbundling also approved a fast track of the vesting of existing share options ahead of the split.

As such, Joffe is now R50m richer, after he received 145,000 Bidvest shares last week.

The unbundling means that he owns an equal number of shares in the newly listed entity as well.

Among the senior leadership, Bidvest CE Lindsay Ralphs, Bidcorp CE Larry Berson, and Bidcorp finance director David Cleasby, all took home millions of rand in newly vested share options.

Bidcorp will continue to be headquartered in Johannesburg, said Joffe in a previous interview.

“The CE (Berson) will continue to reside in Australia. For now we’re only talking about the unbundling and listing on the JSE,” said Joffe, declining to commit to any corporate action that may or may not involve the initial ambition of an offshore flotation.

While the Bidvest executives took millions of rand in shares, they cannot be faulted — at least they paid for them — at a pre-determined price when the incentive options were awarded years ago.

The same cannot be said of the directors at road builder Raubex.

The company’s chief executive, Rudolf Fourie, paid the grand sum of exactly R10 for the 102,278 shares he took delivery of in terms of the company’s deferred stock scheme incentive programme. He immediately went on to sell 41,000 of those for a not insubstantial R759,425.

Finance director James Gibson paid a total R8 for the 79,000 shares he received under the same scheme.

They “paid” a strike price of R 0.01 for each of their shares.

It’s worth noting that Fourie was paid a total R8.7m package for the year ended February 2015, including a bonus of R5.7m. The previous year he took home R9m.

Does enrichment get any grander than this?

Did, or can, any other investor in the company get an equally sweet deal? With that deal, which of course was approved by shareholders, can Fourie and Gibson genuinely claim to be in the same boat as the rest of Raubex’s investors? Did those investors who approved the remuneration scheme bother reading and understanding it?

During the past three years Raubex stock fell 13%.