Joffe shifts loyalties
The two most influential directors of Bid Corporation (BidCorp) effected telling trades on the company’s stock in the past two weeks.
Chairman Brian Joffe acquired R4.7m worth of BidCorp shares and CEO Bernard Berson snapped up R14m worth last week.
In addition to the 53,200 BidCorp shares he acquired, Berson was also a recipient of 49,581 shares that vested to him in terms of the company’s incentive share schemes.
Here is the “telling” part: at the same time, Joffe, through his investment vehicle JDL Holdings, disposed of R39.8m worth of Bidvest shares.
This is the company that has just been separated from BidCorp. It houses mainly SAbased industrial assets, and is now headed by Lindsay Ralphs, with Joffe playing only a nonexecutive director role.
This trade, read together with Joffe’s acquisition of stock in BidCorp, the food services company of which he is now executive chairman, could be the clearest indicator yet of how the legendary entrepreneur and investor sees the prospects of the respective companies.
After all, his strategy of snapping up underperforming companies is what built Bidvest into one of the largest industrial stocks on the JSE over the past 30 years.
“BidCorp was the main attraction for investors and they have both been reasonably volatile,” says Avior Capital Markets analyst Mark Hodgson, of the unbundling of BidCorp from Bidvest.
Which one is the better investment?
Says Hodgson: “BidCorp is more dependent on the weak rand, but things like Brexit will affect it a bit more.”
Barring the immediate hiccups presented by the outcome of the recent British referendum to leave the European Union, BidCorp’s prospects look bright in Europe.
The company could list on a major stock exchange on the continent, or in Asia, as the next phase of its growth.
When the combined Bidvest decided earlier this year to separate into three entities, it left unanswered the question of BidCorp’s (then named Foodservice) proposed listing offshore, which was seriously considered four years ago.
Asked whether BidCorp would list offshore as previously planned, Joffe was noncommittal: “For now we’re only talking about listing on the JSE,” he said.
The decision about listing has indeed been affected by the Brexit decision.
BidCorp is one of the UK’s largest foodservice companies, and draws about a quarter of its revenue from that country.
It also has major operations in Asia, Germany and other developed markets.
Whether Joffe will be proved right — again — on his choice of BidCorp over Bidvest, only time will tell.
But first BidCorp will have to navigate its way past the landmines planted by the Brexit decision.
Last week Vodacom awarded many of its executive directors share options under its incentive performance schemes. The biggest winner was Shameel Joosub, who has been awarded options on 108,100 shares worth R18m. These will vest to him in three years, subject to his meeting predefined performance targets.
The CEO of Transaction Capital, David Hurwitz, sold 4m of his shares in the company, “to fund certain liabilities and other commitments including taxation and share scheme debt.”
That dropped his remaining interest in the company to 4.6m shares.