• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

See More

HCI creams its Clover stake

Mar 15 2010 09:12 Marc Hasenfuss

Company Data


Last traded 152
Change 1
% Change 0
Cumulative volume 85685
Market cap 0

Last Updated: 24-04-2015 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

New game plan for HCI?

HCI betting on Gold Reef jackpot?

HCI expects earnings dip

HCI: Seardel profitable soon


Cape Town - Empowerment group Hosken Consolidated Investments [JSE:HCI]  (HCI) has put a profitable end to an unhappy relationship with dairy group Clover.

On Monday Clover proposed re-purchasing all the ordinary shares held in the company by HCI in a R337m transaction. Not only will HCI get a windfall from the shares sale (affected at over 1 000c/share) but as a holder of 38 million preference shares, the empowerment company will also receive a special dividend of 410 cents per share (totalling R156m).

The special dividend precedes a change to the preference share structure, which effectively precludes these classes of shares enjoying a share of Clover's profits.

HCI held a 34.99% stake (or 31 million ordinary shares) in Clover - an investment market watchers believed could form a mustering point for the empowerment group's further participation in the food sector.

But HCI - as reported in Finweek in June 2009 - was not a happy camper at Clover, and had suggested the BEE deal was in jeopardy because of disagreements over the best way to recapitalise the dairy group.

Finweek reported at the time that HCI CEO Johnny Copelyn went as far as saying he had lost confidence that a capital restructuring would ever transpire at Clover.

The problem in recapitalising Clover stemmed from sensitivities around Clover's farmer shareholders.

Currently Clover - a former cooperative company - utilises a complex capital structure, which ensures dairy producers effectively remain in control of the company.

There are "delivery agreements" linked to ordinary shares between Clover and its producers, which are claimed as non-negotiable and integral to the dairy farmers' relationship with the group.

Clover's decision to buy out HCI's ordinary shares and declare a special preference share dividend comes scarcely three months after the company cashed in its 45% holding in the Clover-Danone joint venture for about R1.1bn.

In a voluntary Stock Exchange News Service (Sens) announcement, HCI said it would be "opportune to realise its investment in Clover".

Clover was more specific around the rationale for the transaction.

In a notice to shareholders, it said the deal would remove the conflict created by the different classes of shares (voting and economic).

Clover directors also felt the deal would "significantly improve" the company's capital structure.

This is because the deal, importantly, also involves a change to the preference share arrangement as regards participation in "super profits". The preference shares will now only benefit from Clover profits based on a fixed dividend, set at 90% of prime.

- Fin24.com



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

10 most expensive cars In the world

This is car porn at its best!


Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote