Tiger Brands: 70% Dangote Flour stake targeted

Food producer Tiger Brands is seeking to raise its ownership to 70 percent in the Nigerian Dangote Flour Mills group. Tiger Brands, which owns names such as Koo, Ace maize meal and Tastic rice among others, bought a 63.35 percent stake in the firm in 2012 for R1.5 billion from one of Africa’s richest men, Aliko Dangote. Dangote Flour Mills is valued at $191 million (R2.1bn). The latest bid by the company seeks to raise its ownership to around 70 percent through the purchase of an additional 332.5 million ordinary shares at 9.50 naira (63c) a share, the public notice said on Friday. Nigerian advisory services company Vetiva Capital said the bid would take place between Friday and the end of the month. In its results for the 12 months to September last year, Tiger Brands incurred an operating loss of R389.2m from its Dangote Flour Mills business. Headline earnings a share for the period fell 7 percent to R1.57 but would have increased by 5.4 percent to R1.78 a share if Dangote Flour Mills was excluded. At that time, the group’s chief executive, Peter Matlare, told Business Report that Tiger Brands was expecting its Nigerian business to break even in the next two years. He said the food producer had been able to improve some efficiencies and had invested in the upskilling of staff. During this period the group was able to restructure some operations which included improving the quality of some products and changing the trading form from credit sales to cash sales. Shares in Tiger Brands declined 0.61 percent to close at R267.59 on the JSE on Friday. – Nompumelelo Magwaza and Reuters