Shuffling along nicely
New investments mainly in technology and media
WHEN STELLENBOSCH-BASED investment conglomerate Remgro sold off its stake in Nampak last year, some key pronouncements were made about its strategy. At that time mention was made of capital being “available for redeployment into assets which are more closely aligned with Remgro’s investment strategy and in which Remgro has a higher degree of ownership and/or influence”. There was also an indication Remgro would “now focus on its core investments”.
If we look at Remgro’s clean-up effort then it’s been fairly industrious in shooing out the rats and mice. Its Nampak minority stake has been sold, the minority stake in diamond miner Trans Hex has been unbundled, its interest in technology group Xiacom was unceremoniously snuffed out and (most recently) the stake in mobile financial services specialist Fundamo sold for a good profit.
But with the market still placing a 20% discount on Remgro’s intrinsic value of R136,12/share it would seem there’s still clean-up work to be done.
In that regard it’s probably encouraging – perhaps even surprising – to note Remgro is in negotiations to sell its major stake in vehicle recovery business Tracker, one of the first tech investments made by the old Rembrandt Group that’s served Remgro satisfactorily over the years. The stake is worth around R1,2bn and Finweek wonders if any of the listed vehicle recovery firms – Digicore and MixTelematics – might be involved in the negotiations.
The stake in former industrial giant Dorbyl – which is being wound down to not much more than a cash balance – should take care of itself.
But what does Remgro plan for its holding in doors and windows’ specialist Wispeco? Noting Remgro’s willingness to back glass specialist PGSI in its strenuous recovery efforts might prompt some speculation that Wispeco (valued at R321m) could form part of a larger steel, aluminium and glass group.
On the food front, TSB Sugar sold its citrus operations, realising an after-tax capital gain of R22m.
Probably the most intriguing interest is Remgro’s 5% holding in Impala Platinum. Clearly, this isn’t an investment where Remgro holds a high degree of ownership/influence… nor is mining a core investment. Its stake in Impala would fetch more than R5bn, which would push Remgro’s cash holdings close to the R11bn mark and mean it held sufficient ammunition for some serious deal-making.
Ever since bailing out of Gold Fields and Billiton/Gencor all those years ago, Remgro hasn’t been considered a commodity investor. But then do we need to make anything of controlling shareholder Johann Rupert’s recent delving into diamond mining (via Reinet)? Unlike Tracker,