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Capevin: 'Unfair but reasonable'

Jan 27 2010 10:22 Marc Hasenfuss

Company Data

Remgro [JSE : REM]

Last traded R127.53
Change R0.53
% Change 0.42%
Cumulative volume 412,899
Market cap R61.36bn

Last Updated: 13/02/2012 at 16:00. Prices are delayed by 15 minutes. Source: McGregor BFA

 

Capevin [JSE : CVI]

Last traded R86.70
Change R1.45
% Change 1.70%
Cumulative volume 4,500
Market cap R3.64bn

Last Updated: 13/02/2012 at 16:02. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Cape Town - The buyout offer to minority shareholders in unlisted liquor group CapeVin Holdings has been declared "unfair but reasonable".

Earlier in January Stellenbosch-based investment companies Remgro [JSE:REM] and Zeder were required to pitch an offer of 335 cents per share to all shareholders in CapeVin Holdings.

A similar offer was extended to shareholders in JSE-listed Capevin [JSE:CVI] Investments (formerly KWV Investments), in this case pitched at 7 005c/share.

Both CapeVin companies ultimately hold shares in JSE-listed liquor giant Distell as their only asset.

The offers followed a deal which saw KWV Holdings empowerment partner Phetogo offering a large tranche of shares to Zeder at 335c/share. Zeder opted to nominate Remgro to take up 75% of the Capevin shares offered by Phetogo.

Questco, the corporate advisory firm given the job of reviewing the offer to CapeVin minorities, said that in determining whether the offer price was fair a comparison needed to be made with the intrinsic value of Capevin Holdings.

Questco estimated the value of CapeVin Holdings to be between 400c/share to 441c/share - hence unfair in terms of pricing.

Looking at the reasonableness of the Remgro/Zeder offer, Questco said a number of points had to be considered:

  • The lack of liquidity in Capevin Holdings over-the-counter (OTC) share trading;
  • The fact that Remgro/Zeder would have operational control after implementation of the CapeVin offer and be able to freely change dividend policies and operational direction;
  • The likelihood that there might not be another corporate event that would provide Capvin shareholders with the opportunity to realise their investment.
Questco deemed the Zeder/Remgro offer reasonable given these "qualitative factors analysed and the current environment within which Capevin and its subsidiaries operate".

CapeVin's circular to shareholders - released on Tuesday - showed that after the Phetogo transaction, Zeder would own about 37% of Capevin Holdings.

Capevin Holdings owns a 51% stake in Capevin Investments.

After the Phetogo deal, Remgro would own about 6% of Capevin Holdings and almost 10% of Capevin Investments. Remgro already has a 32% stake in Distell.

- Fin24.com

 
 
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