LOOKING FOR TARGETS

The sale of Pepkor Holdings has given Brait a windfall of R26.4 billion for acquisitions

BRAIT is seeking investment targets for the R26.4 billion windfall it received from the sale of its stake in Pepkor Holdings as shareholders pressure the company to spend the cash.

The South African investor planned to make as many as three acquisitions after 12 to 18 months, chief executive John Gnodde said on Friday.

Brait would look for companies in the food and consumergoods market at the “value end of the equation”, he said.

Steinhoff International Holdings, South Africa’s biggest furniture company, agreed to buy closely held clothing retailer Pepkor for R62.8bn earlier last week to expand in the discount market.

The deal, the largest purchase of a South African company in more than a decade, will create a retailer with more than 6 000 stores across three continents.

Brait, about 35 percent owned by billionaire Christo Wiese, will get R15 billion in cash from the sale, with the rest in Steinhoff shares.

Smaller shareholders may demand the company spend the proceeds quicker than Gnodde’s time frame, according to Momentum Asset Management.

“Investors don’t want Brait sitting on a cash pile,” Wayne McCurrie, a money manager at Momentum, said.

“The pressure will be on to look for something sooner than later.”

Momentum owns almost 44 000 Brait shares valued at about R3.1m.

The stock, which fell 19 percent the day the Steinhoff deal was announced, rose 2.13 percent to R72 on Friday’s JSE close.

Brait is considering acquisitions in South Africa and Europe, Gnodde said.

Following the Pepkor sale, Brait’s three largest investments will include Premier Group, the South African maker of Blue Ribbon bread and Snowflake flour, Iceland Foods, the UK supplier of frozen foods, and Steinhoff.