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Three-way tussle for Capespan

25 Nov 2011

The battle for outright control of Capespan, the Cape Town-based fruit exporter and logistics group, has seen a new twist.

Irish fruit marketing company Total Produce Plc has thrown open the bid for control of Capespan by increasing its stake in the company from 15% to 20%.

Total Produce has long been a shareholder in Capespan, but until recently it has shown no inclination to increase its shareholding.

The company has now wedged itself right between two influential local entities - PSG-controlled agribusiness investor Zeder and Brian Joffe's industrial conglomerate Bidvest - that are bidding for control of Capespan.

News of Total Produce's increased stake in Capespan came only days after Capespan announced that Bidvest, via BB Investments, had secured a 7.9% stake in the company through openmarket share buying at 240c/share on the over-the-counter market.

Bidvest emerged as a surprise bidder for Capespan in July after Zeder had launched a formal offer to buy out shareholders at 225c/share.

With Zeder having secured a 40% stake in Capespan and another 20% held by Total Produce, Bidvest would now need a much bigger response from minorities to get an influential stake.

Though Bidvest's standing offer to Capespan minorities is pitched above the company's net asset value, it seems a good number of minorities may prefer to stay invested - purely on suspicion that if three large companies are actively seeking to up their stakes there may be future value in Capespan that is not necessarily reflected in the financial statements.

The tilts for control of Capespan have already been good for minorities. The share price has doubled from 120c at the beginning of the year to 240c.

It remains to be seen whether Bidvest - which was recently refused access to Capespan's books - would hike its current "in the market" offer. One market source notes: "It will be difficult for Bidvest to increase its offer ... at least until it knows exactly what it is buying."

To date Bidvest seems happy to leave its buy order in the market. It is a rather strenuous way to build a strategic stake, but there is fortunately some liquidity in the share. Recent daily trading volumes have been between 100000 and 450000.

Source: Financial Mail

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