KWV: just say no

Cape Town - If you are really feeling the pinch, sell your KWV shares - but otherwise hold on to them, experts said following an eventful week for KWV.

Fin24.com reported earlier this week that KWV Limited will unbundle its own wine and brandy manufacturing operations.

In the same week agricultural investment company Zeder made a voluntary offer of R3.75/share to KWV shareholders, valid from Friday.

Analysts reckon this is too little for the company, with shareholders effectively, after the unbundlng, having three routes to liquor giant Distell.

For that reason BJM Private Client Services portfolio manager Roelof Oelofse reckons the offer should not be taken up.

The effect of the unbundling, which should be complete by June, is that the operating side of KWV, which involves wine, spirits and juice, will be separated from the structure of the listed KWV Investment Limited entity, 50% of which is held in Remgro-KWV Investments Limited - which, in turn, owns 58.4% in the listed liquor group Distell.

After the cautionary the KWV share price at one point reached R3.90. KWV chief executive Thys Loubser reckons this is encouraging, because it seems there was a realisation of value being unlocked.

Sanlam Private Investments portfolio manager Humphrey Price considers the KWV share to be worth more than R5, and he would not sell.

He said Zeder's strategy with the offer seems to be to ultimately acquire a 20% equity-accounted stake in the listed KWV vehicle. With the unbundling, shareholders in the unlisted KWV will receive shares in the listed company and 34.9% (the target of Zeder's offer) - would bring them close.

Zeder's investment manager Willem Meyer says the response from shareholders appears positive thus far.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.