WHAT DOES BB HAVE IN ITS SIGHTS?

Finweek English Edition - - Companies & markets - MARC HASENFUSS

AS AN IN­VEST­MENT en­tity, BB In­vest­ment Com­pany may not ring too many bells among mar­ket watch­ers, but the com­pany – a lit­tle known 100% owned sub­sidiary of The Bid­vest Group – is not ex­actly in­con­spic­u­ous.

BB In­vest­ment Com­pany is the ve­hi­cle through which Bid­vest holds strate­gic stakes in waste man­age­ment com­pany En­vi­roServ Hold­ings (24,7%) and Tiger Wheels (19,5%).

But BB In­vest­ment Com­pany also holds two very in­ter­est­ing in­vest­ments in truck­ing group Cargo Car­ri­ers (where it holds a 9,5% stake) and in tourism and leisure group Cullinan (where it has a 10% stake).

Both Cargo and Cullinan are rel­a­tively small stakes (re­spec­tively worth around R20m and R40m) in re­la­tion to Bid­vest’s ar­ray of ser­vice and light in­dus­trial in­ter­ests.

But the pres­ence of Bid­vest – ar­guably one of the savvi­est cor­po­rates when it comes to mak­ing in­spired in­vest­ments – speaks vol­umes for the po­ten­tial and prospects of both Cullinan and Cargo Car­ri­ers.

Whether Bid­vest has big­ger plans for Cargo Car­ri­ers and Cullinan is de­bat­able. Bid­vest is not known to ag­gres­sively build up its strate­gic stakes, though full buy-outs were ini­ti­ated at McCarthy, Ifu­sion, Lithosaver and more re­cently Nam­sea.

Cullinan, which holds a di­verse range of leisure and travel in­ter­ests, would cer­tainly com­ple­ment Bid­vest’s Travel ser­vices (Ren­nies, Har­veys, Carl­son Wagonlit etc). Bid­vest does not re­ally have a ded­i­cated trans­port di­vi­sion, which means cargo car­ri­ers could bridge the gap be­tween “mo­bile di­vi­sions” Bid­vest Auto and Bid­Freight.

Per­haps the only hitch for Bid­vest if it in­tends haul­ing Cargo Car­ri­ers and Cullinan aboard at some stage is that both com­pa­nies are tightly con­trolled. Cullinan is 63,5% held by Trav­corp Fi­nan­cial Ser­vices and Cargo Car­ri­ers is still firmly in the hands of the Bolton fam­ily.

One would as­sume that the ma­jor share­hold­ers in both com­pa­nies must be well aware of what ef­fi­cien­cies, syn­er­gies, fi­nan­cial mus­cle and strate­gic acu­men Bid­vest could bring to both busi­nesses.

Bid­vest, on the other hand, may be happy just to bide its time as a sig­nif­i­cant mi­nor­ity share­holder rather than re­sort­ing to any hos­til­i­ties or per­sis­tent cor­po­rate pres­sure.

Bid­vest ex­ec­u­tive David Cleasby plays down any strate­gic in­tent on Bid­vest’s part in re­la­tion to ei­ther of the in­vest­ments. “We’ve held th­ese in­vest­ments for a long time now…noth­ing has re­ally changed about them.”

Still, it’s a sit­u­a­tion worth watch­ing.

Savvy in­vestor. Brian Joffe

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