Zeder’s talks on possible deals pay dividends

Zeder Investments’ (Zeder) share price recently increased more than 10% to R3,12/share on the JSE after the company said it was engaging with interested parties regarding some of the holdings in its portfolio of investments. This was according to company CEO Johann le Roux.

Zeder currently held stakes in Capespan, Kaap Agri, Agrivision Africa, Zaad, and The Logistics Group.

Le Roux said the majority of the companies in its portfolio had achieved good earnings growth, and proved to be more resilient than expected during the COVID-19 pandemic.

“We had good winter rain in the Western Cape and great rain in the summer rainfall areas, with bumper maize crops. There are always many things you can’t control in agriculture, but we still see a positive cycle for agricultural investments in the short to medium terms,” he said.

Zeder sold its stakes in Pioneer Foods and Quantum Foods in 2020.

“[Both transactions were] good opportunities to unlock value for our shareholders,” Le Roux said.

He confirmed that Zeder was considering the undisclosed approaches by interested parties. “The board is evaluating the approaches and we’ll communicate in more detail to the market on these talks at an opportune time, but there is no specific time line at the moment.”

Long-time Zeder analyst and commentator Anthony Clark, from Small Talk Daily, said the rising share price reflected the market’s approval of several developments taking place at Zeder at the moment.

“The Pioneer [Foods] sale was a good transaction; the special dividend from 2020; the resignation of the previous CEO, Norman Celliers; and a shake-up of the strategic vision [were] all positively received by the market,” Clark said.

He speculated that the remaining holdings in Zeder’s portfolio could potentially offer profitable transactions and add further value for shareholders.

“Capespan and The Logistics Group both had a significant [increase] in net asset value because their respective industries in shipping and fruit had done extremely well. Those two assets should be easily [saleable] to interested parties.”

However, according to Clark, the seed business, Zaad, which was the single largest asset in the company, would possibly be retained by holding company PSG and incorporated into PSG Alpha, its private equity vehicle. “Interestingly, Zeder downgraded Zaad’s value by 1% in its results, perhaps indicating that it’s positioning [itself] to buy it out on the cheap,” Clark said. – Wouter Kriel

MOST COMPANIES IN ZEDER’S SHARE PORTFOLIO FARED WELL DESPITE THE PANDEMIC