AB InBev could find Distell’s ciders tasty

THERE is still no official word on Anheuser-Busch InBev’s (AB InBev’s) bid for slightly smaller rival SABMiller, so it may be too soon to open the taps of speculation over possible outcomes for Stellenbosch-based liquor group Distell should such a mega-brewer deal transpire.

SABMiller has long held a roughly 29% stake in Distell, which — aside from its iconic wines and brandies — produces a couple of cider brands that have no doubt disrupted the local beer market. The other significant shareholder in Distell is Remgro, which holds an effective 31% stake.

There is a common assumption that Remgro would covet SABMiller’s stake in Distell, and obviously this issue bobs quickly to the surface if the brewer is swallowed by its rival. The matter was raised last week at Remgro’s investor presentation, where CEO Jannie Durand confirmed there were shareholder agreements in place at Distell. He noted: “Our pre-emptive rights are very strong.”

The Distell stake would of course be a drop in an ocean of beer should AB InBev and SABMiller merge. Superficial it might be, but then Distell’s enormous success in ciders (it ranks as the second-biggest producer in the world) and the potential to replicate the local success story throughout Africa might well appeal to growth-thirsty AB InBev.

TECHNICALLY, Naspers chairman Koos Bekker was under no obligation to tell fellow shareholders he intended selling his direct stake in the company. But he was always proud as CEO to emphasise that the interests of shareholders came first, and now they have been kept in the dark over an issue that could have a material effect on the value of their holdings if the move is interpreted as a vote of no confidence.

For fellow shareholders to find out about the sales they would have had to delve deep into the 2015 annual report to find a sentence tucked away in the remuneration report stating that Mr Bekker had an indirect beneficial interest of 4,688,691 Naspers N ordinary shares. Then they would have had to find a copy of the 2014 annual report that stated on page 112 that at that time he owned 16,376,499 shares in total.

Naspers’s valuation is at a stratospheric level, and the company faces severe headwinds from volatile Chinese markets. If Mr Bekker wanted to send out the message that Naspers’s prospects remain great despite him selling a huge chunk of his holding, quietly offloading it was not the way to do it.

However, the fact is he remains committed to Naspers and is still one of the 15 biggest shareholders. And given that Mr Bekker has never drawn a salary from the company in 17 years, few would begrudge him for cashing out on retirement.