Western Cape Business News

Send  Share  RSS  Twitter  12 Dec 2011

FOOD & BEVERAGES: Capespan Ignores Elephants In The Room


Recent Western Cape Business News

IF new Capespan CEO Johan Dique wanted to reinforce a notion that there is an intense focus on sharpening operational activities then he certainly succeeded.
The recent interim results for the Bellville-based fruit exporting and logistics group makes no mention of the behind the scenes drama unfolding on the share register – with PSG owned Zeder and aggressive industrial conglomerate Bidvest looking to snag influential stakes in Capespan.

Talk about ignoring the elephants in the room…

Although neither Zeder  or Bidvest crack a mention in the interim commentary, Capespan did make a rather significant decision last month in not allowing Bidvest access to certain financial information (in other words: “sorry, no due diligence boys”).

Whether this signals tacit support for Zeder as the ‘shareholder of reference’ is open to debate.

For what it’s worth, Capespan enjoyed a sound first half to end June, generating R1.26 billion in turnover and posting R26 million in pre-tax profits. Dique says international markets are not strong at present, which is hampering the volumes being exported out of SA.

What’s more, the lower South African citrus industry volumes will also impact negatively on the through-put in Capespan’s port terminals and negatively impact the profitability of the Logistics Division.

There are some positives, though. Capespan traditionally generates the majority of its profits in the second half of the year. And there should be tangible benefits from the weaker rand.

But back to the elephants. At last count Zeder had snaffled a 40% share in Capespan, which means it will be damned hard to displace the PSG owned investment company as the majority shareholder in Capespan.

Bidvest – which has a substantial logistics arm – is still scratching for Capespan shares. Bidvest has a standing order for 40 million Capespan shares at 240c/share, but has to date seemingly only secured around 2.3 million shares.

It seems the only way Bidvest will be able to secure a meaningful stake in Capespan is if Total Produce Plc, the Irish fruit marketing company that holds a roughly 15% stake in Capespan, decides to sell out. So far there are no indications Total Produce is a seller.

Naturally Bidvest could also twist Zeder’s arm to sell their stake out at a profit. But one suspects Zeder will not let go of its hard won stake in Capespan unless Bidvest paid top dollar. Not impossible, but unlikely.

Although, if Dique – who earned his stripes in turning Senwes into an outright winner – churns up an impressive second half for Capespan, who knows what might transpire between Bidvest and Zeder.

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