A circular relating to HCI's proposals to separately list Niveus Investments contains a disclosure that HCI recently increased its stake in KWV to 39.9% by buying an additional 3m shares from KWV Empowerment Employees Trust (KEET).
HCI, or rather Niveus (which will in future house the KWV holding), has a further pre-emptive right of another 3m shares held by KEET.
HCI, which is headed by former trade union stalwarts Johnny Copelyn and Marcel Golding, provides very little detail around the transaction in the Niveus circular.
No mention is made of the price at which KEET's shares were bought - though there is a note stating that HCI borrowed some R26m to purchase the extra 3,8m KWV shares (including the roughly 350000 shares it bought via a mandatory offer of 850c/share to minority shareholders).
If the R26m is the quantum of these transactions then it seems safe to presume KEET was not the recipient of a premium price offer.
The terms of the pre-emptive right were not disclosed.
Should HCI/Niveus secure the additional KEET shares, their stake in KWV would rise to 44.4%.
HCI's decision to top up might rile KWV shareholders, some of whom attempted to introduce a resolution for the cash-flush company to buy back its own shares at an AGM late last year.
The buy-back resolution was not tabled for technical reasons, but at the meeting Golding, who chairs KWV, effectively ruled out the chances of a share buy-back. He indicated that KWV had elected to use the cash on hand to grow the business.
KWV carries an official net asset value of around 1800c/share, underpinned by heritage assets like farms, brandy stocks and art works.
Source: Financial Mail
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