Reinet bats guardedly

Cape Town - The latest management report from Reinet Investments, the most recent investment vehicle created by the Rupert family, is unlikely to set shareholders' pulses racing.

The report, covering the three months to end-December 2009, shows Reinet - which was formed in October 2008 - has not changed much since its inception.

There is still a dominant weighting in the shares of British American Tobacco (BAT), which comprise 81% of the €2.3bn (R25bn) net asset value.

Trilantic Capital Partners, which ranks as Reinet's most significant - or most widely reported - new investment (it was acquired out of Lehman Brothers) - comprises just 0.5% of net asset value (NAV).

Reinet's cash pile dropped by €22.4m to €371m after further (unspecified) investments were made in "other" investments and into Trilantic. The payment of Reinet's portfolio of these other investments was valued at €53.4m (R550m).

To date the company has not exactly been forthcoming in detailing the individual holdings in the "other" portfolio, but the management report noted that a net amount of €2.3m was invested in the three months ending December 2009.

The market seems in two minds about Reinet. Some market watchers believe Reinet missed out on a raft of well-priced opportunities that floated by in the wake of the global financial crisis in 2008. Other believe the cautious investment approach is prudent at this delicate juncture on the markets, arguing that Reinet could afford to wait for the most opportune moment to make the so-called big investments.

Reinet's last stated NAV of abot R25bn translates into 1 270 cents per share. This means Reinet's shares, trading at 1 178c at midday on Friday, are discounting the company's underlying value by about 7%.

- Fin24.com