Second buyout as Zeder makes bid for Capespan

© Aliaksandr Mazurkevich – 123RF.com

Trade in Capespan's over-the-counter shares have been suspended since the end of July, prompting speculation that Zeder, which already owns 71%, would pitch an offer to the remaining minorities.

Capespan's unlisted shares were suspended after the Financial Services Board raised questions about the legality and regulation of over-the-counter platforms in SA.

This is the second minority buyout initiated by Zeder in a year, having concluded the buyout of minorities at Agri-Voedsel, essentially a proxy for consumer brands conglomerate Pioneer Foods Group, last year.

While that buyout was contentious and saw pockets of resistance, the Capespan offer looks likely to sway the few remaining minorities.

Offer price

The offer, to be settled in Zeder scrip in a ratio of 85 Zeder for every 100 Capespan, translates into an offer price of 650c per share for Capespan shares - representing an official 65% premium over the last-traded overthe-counter price. At this week's Zeder share price, the value of the buyout is about R578m.

There is no cash offer alternative but Capespan minorities are unlikely to quibble since Zeder's shares have rallied strongly in recent weeks - the scrip-based offer represents a premium of more than 75%.

Chris Logan, of Capespan shareholder Opportune Investments, said Zeder's offer was a nice uplift after a prolonged share trading impasse on the over-the-counter platform.

"What is comforting about getting Zeder scrip (in settlement) is they have shown decisiveness in their underlying investments, especially ensuring proper leadership is in place."

No intention to list

Zeder CEO Norman Celliers said as there was no intention to list Capespan in the near future, the offer allowed minorities to exchange unlisted, illiquid shares for listed Zeder shares.

"This solves the liquidity problem they currently face while also benefiting from a more diversified exposure through Zeder."

Zeder reported year-to-end February results yesterday, stating its latest sum-of-the-part value - the best gauge of performance in an investment company - at R14.1bn or 975c per share. Zeder also hiked its dividend by 22% to 5.5c per share.

Celliers said Zeder's focus would remain on the existing portfolio but would include an "invigorated focus on growth from within the portfolio companies" and adding strategically when values were attractive.

Other acquisitions

Zeder reported yesterday it had acquired Novo Packhouse for R100m and a Theewaterskloof farm for R140m.

Zeder's anchor investment, Pioneer, accounts for about 75% of the portfolio value.

Source: Business Day via I-Net Bridge