PASS­ING THE BUCK

Finweek English Edition - - INVESTMENT - Si­mon Brown

Pi­o­neer Food is do­ing a Rem­gro as it tosses out the un­wanted Quan­tum Foods by way of an un­bundling to Pi­o­neer share­hold­ers. Quan­tum Foods op­er­ates in the chicken busi­ness and no doubt Pi­o­neer tried to sell the busi­ness but wasn’t able to so it’s pass­ing the buck by ‘giv­ing’ it to share­hold­ers, who end up stuck with a stock no­body wants and in a sec­tor un­der se­ri­ous pres­sure. Rem­gro did this with Tran­shex, the com­pany didn’t want it and couldn’t sell it so as a last re­sort Rem­gro un­bun­dled it. Quan­tum added al­most 17% to Pi­o­neer rev­enue but recorded a loss of some R33m in the last half year re­sults, and the ditch­ing of the busi­ness sug­gests man­age­ment see no im­prove­ment in the chicken sec­tor for some time. Bot­tom line is good for Pi­o­neer and that’s good for Pi­o­neer share­hold­ers, but what is it go­ing to do with the Quan­tum shares it’s go­ing to end up with? si­monb@fin­week.co.za

@Si­monPB

Pi­o­neer Food Group

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