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Who off-loaded Pioneer share?
Mystery shrouds a deal in which a valuable chunk of consumer brands conglomerate Pioneer Food Group was passed on to asset management company Allan Gray last week.
Allan Gray paid around R750m to snap up a 6% stake in Pioneer.
An advisory issued to Pioneer shareholders last week noted only the Allan Gray share, adding no details of the transaction. Allan Gray now ranks among the top five largest shareholders in Pioneer. Pioneer's largest shareholder is PSG-aligned agribusiness Kaap Agri Voedsel, which holds a stake of about 28%.
At the time of going to press there was much conjecture around the identity of the shareholder or shareholders that off-loaded their shares.
The FM has established that Kaap Agri Voedsel, recently split off from Kaap Agri with the Pioneer holding its only asset, was not the seller.
Market talk has understandably centred on Cape-based agribusinesses Moorreesburg Koringboere (MKB ) and Overberg Agri - both significant minority shareholders in Pioneer - as the most likely sellers.
Overberg seems the most obvious seller after it last month unbundled 8,4m Pioneer shares to shareholders - which include listed agribusiness investor Zeder and PSG empowerment affiliate Thembeka Vunani Securities small-cap analyst Anthony Clark believes Overberg may have sold a further tranche of Pioneer shares to cover the tax liability on the unbundling exercise.
Another argument is that MKB has sold off part of its Pioneer holding to raise cash to shore up its operations.
A potential buy-in by powerful agribusiness Senwes into MKB was scuppered recently when certain shareholders voted against changing ownership restrictions that would have facilitated the entry of a new strategic investor (Fox February 24). At the time there were suggestions that though the Senwes investment carried significant operational advantages, the offer price discounted the true value of MKB.
By selling a large portion of its Pioneer shares, MKB would have to rely more heavily on its own operations to drive future returns.
More importantly, with part of the Pioneer "comfort blanket" removed, MKB shareholders may be more accommodating should Senwes call again.
Source: Financial Mail
Source: I-Net Bridge
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