Total onslaught at Capespan
Second bidder comes to the table
WHAT IS IT about Zeder Investments – the agribusiness arm of PSG – that brings out the best in minority shareholders? Finweek reported recently on how Capespan’s huge value offering was driving Zeder’s bid to gain more influence at the Bellville-based fruit marketing group.
However, it seems Zeder’s formal bid to buy out minority shareholders at what initially appeared to be a premium priced offer of 225c/share has brought a rival bidder to the table.
No sooner had Zeder disclosed some open market buys that pushed its stake in Capespan to 32,7% than a bid for 50m Capespan shares at 240c popped up on overthe-counter (OTC) trading screens. That’s a sizeable bid worth R120m and representing 15% of Capespan’s issued shares.
But it appears another party could be looking to block Zeder’s advances – which, for Zeder, might bring back horrible memories of what transpired at KWV Holdings recently. Readers will remember Zeder’s attempts to orchestrate a merger between KWV and Pioneer Foods’ Ceres Beverages were scuppered by vociferous minority shareholders.
Who could the rival bidder be? Capespan MD Johan Dique wasn’t giving much away. “The process whereby takeovers are done is highly regulated… We therefore communicate responsibly what we’re obliged to do, as well as all additional information so as to fulfil our responsibilities towards our shareholders.”
Dique says: “What we’ve published so far is all that we’re prepared to do and we have no further comments.”
To date, Capespan has acknowledged an “expression of interest” and listed the current bid spreads on Capespan’s OTC market. The spreads at the time of writing saw bids for 33m shares at 225c, 2m at 230c, 50m at 240c and 1m at 245c. Some market watchers joked perhaps it was Hosken Consolidated Investments – which acquired Zeder’s stake in KWV – making a late dash for Capespan.
But the smart money reckons Irish fruit company Total Produce plc (TP) is the most likely party to pitch a rival bid to Zeder. TP holds 47m shares or 14% of Capespan. Fin
week emailed questions to TP but at the time of writing hadn’t received word from the company.
Presumably TP would be hunting a bigger stake in Capespan for strategic reasons. TP’s annual report pretty much lists Capespan as one of its facilities and – perhaps more significantly – TP CE Rory Byrne has been a non-executive director of Capespan since 2000.
The current bid spread shows a determination to build an obstructive stake and one might forgive Zeder (which, we should remember, has accumulated the bulk of its stake closer to the 100c mark) for opting to sell out at a serious profit. We doubt very much Zeder will contemplate that… yet.
But as we have argued previously, there’s something more to Capespan than just a 250c net asset value – even though it’s very likely retail investors (some already optimistically offering scrip at 400c) will be tempted to jump ship at the current offer prices. Investors might find a clue in its annual report, which shows just how significant (and profitable) Capespan’s logistics division – comprising port terminal operations, shipping and cold storage – has become over recent years.
It appears another party could be looking to block Zeder’s advances – which might bring back horrible memories of what transpired at
KWV Holdings recently
Finweek reckons its logistics division – especially its Fresh Produce Terminal, where Transnet has apparently offered Capespan a lucrative arrangement – will provide the steam for Dique’s AGM prediction that Capespan is set for double digit growth in return on equity.
Come to think of it, we wonder whether it’s that far-fetched to ponder whether shipping giant Grindrod might not look to boarding a value-laden Capespan.