THE GOOD, THE BAD & THE UGLY|
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.