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Johannesburg - Investment company Brait SE [JSE:BAT] plans to sell its 6% stake in furniture retailer Steinhoff [JSE:SHF] International within 12 to 18 months, its Chief Executive Officer John Gnodde says.
“Brait’s strategy is to hold majority controlling positions in privately owned businesses, so what we offer the market is access to market leading, sizable private companies,” Gnodde said by phone on Thursday. “So off the back of that, holding 6% of a public company doesn’t really fit in with that strategy.”
The shareholding, worth about R15.6bn at Steinhoff’s current share price, was acquired as part of Brait’s sale of its stake in clothing retailer Pepkor to Steinhoff late last year - part of a $5.7bn transaction.
Brait agreed to pay $1.09bn for 80% of UK health-club provider Virgin Active in April and £780m for 90% of UK women’s clothing retailer New Look last month. The company was seeking as many as three acquisitions in the European and South African food and consumer-goods market following the R26.4bn windfall it received from the Pepkor sale, Gnodde said in November.
‘Good Business’
Steinhoff, SA’s biggest furniture company with plans to list in Frankfurt this year, is “a good business, doing the right things, so there is no rush,” Gnodde said on Thursday. The stake will be sold in tranches in a “responsible and proper manner” as Brait looks for the highest returns, he said.
While the proceeds from a Steinhoff stake sale have yet to be earmarked for a specific acquisition, Brait sees further opportunities in the consumer industry, Gnodde said. The company is seeking “strong brands with a strong market position that shows higher growth and very high cash conversion,” he said.
Brait shares gained 1.8% to R113 as of 13:22 at the JSE, extending the two-day increase to 4.1%. Steinhoff advanced 0.8% to R72.60, valuing the company at R260bn.
