Durban - When Anheuser-Busch (AB) InBev announced a $100 billion (R1.4 trillion) acquisition of rival SABMiller in October, the transaction also opened a door for the disposal of the 26.4 percent Distell stake.
The Public Investment Corporation (PIC), the state-owned pension fund, has seized this opportunity and snapped up the stake in Distell late last week.
The stake came up for grabs after the Competition Commission said it would give AB InBev the right to acquire SABMiller the go-ahead on condition the country’s largest brewer sold its stake in Distell.
Now that the condition has been met, the PIC has become a new shareholder in a stake that is worth about $565 million based on the current market value.
The PIC though would not become a major shareholder in Distell as Remgro, an investment company, has a bigger shareholding in the Stellenbosch-based company with a 53 percent stake.
Distell last week gave a short comment in welcoming the PIC on board.
The group’s communications manager, Dennis Matsane, said: “Distell welcomes the PIC as a new shareholder, subject to the conclusion of the sale.”
In September Remgro said it planned to raise more than R9.9 billion from shareholders as the company controlled by South African billionaire Johann Rupert considered deals including a right to buy the Distell stake from SABMiller.
Remgro planned to raise the funds through a rights offer and the sale of B shares.
It announced that investors would be entitled to 10 shares for every 100 they owned at a price of R192.50 each under the terms of the rights issue which was discounted for 21 percent on the day’s closing price on the JSE on September 27.
Michael Treherne, a portfolio manager at Vestact, said there would not be major changes in the running of Distell as Remgro still owned more than 50 percent of the company.
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Treherne said it seemed that the PIC outsmarted Remgro as the company was hugely favoured in getting the Distell stake.
“Given that the new investor doesn’t need to be operationally involved, anyone who had the cash to buy the stake could have. The brand portfolio that Distell has is quality, which should be producing strong cash flows for whoever owns the company. The only question to answer now is, what did the PIC pay for the stake? Remgro seemed set to take up their pre-emptive right to buy the stake (it even did a rights issue earlier this year which was hinted at using the cash for Distell), it would seem that the PIC outbid Remgro,” explained Treherne.
Remgro shares decreased 0.95 percent on the JSE to close at R224.53 on Thursday.