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Send  Share  RSS  Twitter  26 Jul 2009

VENTURES: Rupert Empire Re-born

 



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STELLENBOSCH…one of the financial capitals of the world. You must be joking! Well, maybe such a notion is not that far fetched with proposals to merge the two Rupert family controlled investment companies Remgro and Venfin. Merging the two entities consolidates the Rupert family’s SA empire into a single Stellenbosch-based structure, creating an investment company holding assets worth more than R50 billion.

Not only do we have a Stellenbosch company with a large chunk of SA industry and commerce sitting in the palm of its hand, but also a new look entity capable of profitably surveying the surfeit of well-priced opportunities created by the local economic downturn and global financial crisis.

New look Remgro will hold influential investments in an array of businesses across the financial, industrial, liquor, food, health, mining and technology landscape.

Interests will include well known companies like banking giant FirstRand, consumer brands conglomerate Unilever, Rainbow Chickens, liquor group Distell, private hospitals group Medi-Clinic, gases group Air Products, Impala Platinum, e.tv, vehicle recovery specialist Tracker and sports brands business Sail.

Venfin, which has largely concentrated on technology investments, also brings new, exciting investments to the table – most notably undersea cable business Seacom and fibre optics specialist Dark Fibre as well as new technology ventures like Britehouse.

The irony, of course, is that Remgro and Venfin were initially part of the old Rembrandt Group. In 2000 Rembrandt was split into Venfin and Remgro – both companies then viewed as having different investment strategies.

Fusing Remgro and Venfin back together again signals a willingness by the Rupert family and the respective management teams to actively build-on the legacy that the old Rembrandt group created in SA. Perhaps some consideration will even be given to re-stating to old Rembrandt name?

As things stand the Rupert family empire stretches to all the main financial capitals of the world. Newly formed Reinet Investments has extended its presence from London to New York after taking over a private equity arm that belonged to Lehman Brothers. Luxury group Richemont has long been domiciled in Zurich in Switzerland.

Stellenbosch might not have the same ‘sexy money’ appeal as London, New York or London – but indications are that new look Remgro, which has close to R6 billion in free cash, could be a serious player in local investment markets again.

Early indications are that Remgro will probably be mobilising its cash pile to ‘top-up’ on a number of existing investments in Venfin – as well as follow through on new opportunities that Venfin no doubt has in its new ventures pipeline. Remgro – which has not been too active on the deal-making front in recent years – has also lately started showing signs of intent.

Last month Remgro reported that it had pushed its stake in liquor group Distell to over 32% after acquiring around 4 million shares in KWV Investments in a R258 million transaction. With unlisted KWV Limited splitting into KWV Holdings (housing its wine and brandy operations) and CapeVin (holding the shareholding in Distell), there seems a good chance Remgro could top up its stake in Distell further.

Remgro has also continued to invest in offshore technology venture Xiocom, where its total commitment now tops $28 million.

Remgro has also continued to back the Lubner family in glass manufacturing group PGSI. The group bought more shares in PGSI from a minority shareholder and now owns 25% of PGSI. It has also advanced a bridging loan of R29 million to the business ahead of a rights issue that will raise R300 million for PGSI.

Remgro continues to be enamoured by Business Partners Limited – the old Small Business Development Corporation – buying another 931 000 shares for around R6 million. Remgro now owns 20.8% of Business Partners.

Quite possibly a strategic holding in the silo of ‘developing SA businesses’ is something that could pay off for the enlarged Remgro down the line.


 
 
 
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