THE GOOD, THE BAD & THE UGLY|

Finweek English Edition - - Companies & markets - EDITED BY MARC HASENFUSS

SPIN THE GLOBE

WILL BRAIT MAKE IT three-ina-row of private eq­uity deals with en­ti­ties con­trolled by re­tail ty­coon Christo Wiese? Some years ago Brait sewed up af­ford­able fash­ion re­tailer Pep­kor, and the private eq­uity group’s ad­vance on su­per­mar­ket gi­ant Sho­prite is pro­ceed­ing well. WITH SOUTH AFRICA’S gam­bling sec­tor pretty much tied up (for now) it’s un­der­stand­able that casino groups are now look­ing off­shore. Peer­mont Global is eye­ing op­por­tu­ni­ties in Spain and Sun In­ter­na­tional looks set to bet on Chile and pos­si­bly Bri­tain, Rus­sia and Nige­ria as well.

Some in­vestors may pre­fer casino list­ings to spend their ex­cess cash by broad­en­ing their leisure ac­tiv­i­ties rather than chas­ing off­shore op­por­tu­ni­ties – where, frankly, so many big­step­ping SA com­pa­nies have stum­bled.

We still think there’s a great deal to be done in SA if one of the ma­jor play­ers cosies up to Nas­daq-listed Cen­tury Casi­nos, which holds two of the “smaller” li­cences in SA – Cale­don and New­cas­tle – but has al­ready shown its ap­petite to ac­quire fur­ther SA gam­bling as­sets.

We could en­vis­age a deal where a gam­ing group may con­sider swap­ping their SA casino hold­ings, or in­di­vid­ual casino sites, for shares in Cen­tury. With Cen­tury hold­ing quite an in­ter­est­ing port­fo­lio of casi­nos in North Amer­ica, Europe and on cruise ships, such a deal would rep­re­sent some nifty ge­o­graph­i­cal di­ver­si­fi­ca­tion.

WAIT­ING WITH BRAITED BREATH

You could rea­son­ably ex­pect Brait to ex­tract good value from Wiese’s two re­tail gems, which are both ex­cel­lently man­aged and highly prof­itable busi­nesses with solid, longer-term prospects (which is ex­actly why there was so much share­holder re­sis­tance to the private eq­uity deals).

But what level of private eq­uity en­thu­si­asm would there be for Wiese’s wall­flower busi­ness, Trade­hold? Per­for­mance-wise, some might ar­gue that Trade­hold is the do­main of turn­around spe­cial­ists rather than private eq­uity play­ers.

But then it’s worth check­ing Trade­hold’s share reg­is­ter, where an en­tity called the SA Private Eq­uity Trust holds a not in­sub­stan­tial 14,3% stake. SA Private Eq­uity Trust, if we’re not very mis­taken, is an ap­pendage of Brait, which means that the private eq­uity spe­cial­ist al­ready has a beach­head in Trade­hold.

Now the ques­tion is whether that fairly large strate­gic stake rep­re­sents merely a “just in case” po­si­tion in strug­gling Trade­hold, or whether Brait in­tends strik­ing out with a private eq­uity pro­posal at any time soon.

OF PARAMOUNT IM­POR­TANCE

THOSE WATCH­ING the re­sus­ci­ta­tion ef­forts at long sus­pended prop­erty list­ing Shops for Africa will be heart­ened to see that Arnold Maresky has been ap­pointed an ex­ec­u­tive di­rec­tor. The big ques­tion now is whether any deal flow will quickly fol­low Maresky, a di­rec­tor of ac­quis­i­tive Paramount Prop­erty – which is now con­trolled by Growth­point.

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