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Send  Share  RSS  Twitter  26 Jul 2011

VENTURES: Zeder Roots For Fruit

 



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STELLENBOSCH-based agri-business investor Zeder has not let the windfall earned from its sale of its controlling stake in liquor group KWV Holdings lie idle.

Last month it emerged – not terribly surprisingly – that Zeder was keen on securing outright control of Bellville-based fruit exporting giant Capespan.

Zeder is offering to buy out minority shareholders in Capespan – mainly farmers and Ireland-based Total Produce Plc – at a premium price pitch of 225c/share.

If Zeder is successful then it will be forking out around R468 million to buy shares it does not already own in Capespan.

And Zeder looks very determined. But at the time of writing it looked very much like a rival bidder – most likely Total Produce - was trying to build a position in Capespan. The bidder was pitching for shares at prices higher than Zeder’s offer – going as high as 250c. By that time Zeder had already acquired around 15 million shares at 225c on the OTC (over-the-counter market) – in deals worth over R30 million. That suggests more than a few shareholders are willing to sell – and may point to Zeder securing a very dominant stake in Capespan even if large shareholders like Total Produce Plc decide to hang onto their shares.

More shareholders are bound to sell at the higher prices, which could mean that Capespan’s issued shares might sit largely in the hands of two or three shareholders. But Zeder looks to have stolen the march on other bidders, and should retain its status as Capespan’s largest shareholder.

At last count Zeder – which initially held around 28% of Capespan – had bumped its stake up to almost 33% of Capespan.

At this juncture it seems Zeder, which likes to invest at below fair value, might well have secured a long term bargain at Capespan.

Capespan has a net asset value of some 250c/share – which implies an immediate value proposition. But Zeder is obviously also banking on new CEO Johan Dique (fresh from some serious successes at Senwes – see CBN’s May edition) tweaking operations to ensure Capespan delivers some serious returns over the longer term.

From what CBN understands, quite a lot of emphasis will be laid on growing the logistics side of Capespan’s business – perhaps even involving an acquisition or two.

Of course, if the rand should start to show signs of markedly weakening then Zeder will really be in the pound seats (so to speak).


 
 
 
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