Shares in Distell and CapeVin were initially marked down sharply on the JSE this morning after the bombshell that the Public Investment Corporation is snapping up 26.4% of the world’s second larget cider maker, Distell. Remgro and CapeVin, who had a pre-emptive right over Anheurer-Busch’s holding in the largest SA liquour corporate, have waived their rights to up their holdings in Distell, handing a serious stake in the company to the Government Employees Pension Fund.
This was clearly not Johann Rupert’s game plan as Remgro recently held a massive rights offer, presumably to assemble a warchest to take the brewers out.
JOINT ANNOUNCEMENT REGARDING THE SALE BY ANHEUSER-BUSCH INBEV SA/NV ("AB INBEV") OF ITS INTEREST IN DISTELL GROUP LIMITED ("DISTELL") Shareholders in Remgro and Capevin Holdings are referred to the announcement made by AB InBev today, namely that AB InBev has entered into a binding agreement to sell its entire shareholding in Distell, representing approximately 26.4% of Distell's issued share capital ("the Distell Shareholding"), to the Public Investment Corporation (SOC) Limited ("the PIC"), acting on behalf of the Government Employees Pension Fund ("Sale"). The Sale is still subject to the approval of the South African competition authorities. Remgro and Capevin Holdings, who together hold a 52.8% controlling interest in Distell via Remgro-Capevin Investments Proprietary Limited, of which each is a 50% shareholder, each confirm that, after due consideration, they have elected to waive their pre- emptive rights triggered as a consequence of the Sale. Both Remgro and Capevin Holdings welcome the PIC as a shareholder in Distell, subject to the conclusion of the Sale. Stellenbosch 15 December 2016 This latest rearrangement of deckchairs is a serious blow to SA wine as what the industry needs is strong foreign investment from the likes of a Brown Forman or Pernod Ricard to break SA wine out of the laager and onto the international drinks scene. The PIC has nothing to offer SA wine in this regard except the dead hand of a government quango. Just look at their other sparkling investments like the controversial Nigerian energy deal. As a vehicle for broad-based black economic empowerment, perhaps the only sensible reason for Johann to allow them a stake, it's also been a total dud. The only thing left now is for CapeVin to distribute its shareholding in Distell to its hardpressed shareholders who have been funding the extravagant lifestyles of Marie biscuit munching directors in their La-Z-Boy recliners for many years.
Disclosure: the author is a shareholder in CapeVin