Share deal intrigues Sovereign investors
In a book-over deal on New Year's Eve, 3.7-million shares in Sovereign changed hands, equivalent to about 4.8% of its issued shares. Should the buyer be an existing Sovereign shareholder, the trade might have pushed the ownership level through the 5% threshold, which requires disclosure of the buyer's identity.
Sovereign has gained almost 12% in the past week as market rumours suggested the book-over deal was struck at R8 a share - markedly higher than the price at the end of last year. Market watchers have raised the possibility of a strategic investor emerging days before shareholders meet to vote on a restructuring scheme aimed at enhancing Sovereign's empowerment credentials and allowing executive management to buy a meaningful stake.
There have been suggestions that the restructuring scheme will insulate Sovereign against any takeover tilts.
Vunani analyst Anthony Clark said on Wednesday that the trade would be a nice little "nest egg" for anyone looking to take a peck at the poultry stock.
"I understand that a party has perhaps accumulated enough of a stake to block or even 'force' other measures to occur at the Sovereign general meeting."
Sovereign trades at a significant discount to its last stated net asset value. This has fuelled speculation that the company is a takeover target for one of the larger poultry players.