Capevin dissolving a pyramid

Cautionary announcements from unlisted Capevin Holdings and listed Capevin Investments point to a simplification of the complex pyramid holding structure hanging over liquor giant Distell.

Capevin Holdings effectively holds a 14.8% stake in Distell via Capevin Investments, which holds a 29.2% stake in Distell.

More importantly the potential dismantling of the pyramid structure could fortify the equity positions of Johann Rupert's industrial giant Remgro and PSG-owned Zeder.

Zeder is the biggest shareholder in Capevin Holdings with a 39.4% stake, while Capevin Holdings is the biggest shareholder in Capevin Investments with a 51% stake.

But Remgro holds 33.5% of Distell through an 11.3% stake in Capevin Holdings and 9.6% of Capevin Investments coupled with a 28.9% stake held via KWV-Rembrandt Beleggings Zeder's effective holding in Distell is around 20%, with beer giant SABMiller holding 29.1%.

Market watchers believe Capevin Holdings could be dismantled after unbundling its holding in Capevin Investments to shareholders.

Whether there are also plans to dismantle Capevin Investments is not clear at the moment.

But the additional liquidity in Capevin Investment shares - which have, until recently, traded at a hefty discount to the underlying Distell asset, could lead to deep pocketed shareholders like Remgro and Zeder upping their effective stakes in Distell.

Remgro does not need to buy many more Capevin Investment shares to trigger a mandatory offer by going through the 35% ownership threshold.

But will there be sufficient numbers of willing sellers of Capevin Investments stock?

Source: Financial Mail