JSE listed investment firm Brait is looking to sell its interests in glass maker Consol and media group Primedia‚ marking the end of the private equity portfolio that held the assets.
Since the global financial crisis‚ Brait – majority-owned by Christo Wiese – has moved towards long-term investments in sizeable assets.
“We will exit these over the next two years‚” Brait chief executive John Gnodde said this week of Consol and Primedia.
It is understood that bankers are already working on a potential listing of the two companies this year‚ but Gnodde would not be drawn on this.
He said proceeds from the sale “will be redeployed to growth areas”.
The word in the market is that potential buyers have also made approaches for both assets.
The Brait IV Fund owns 30% of Consol and about 25% of Primedia. In turn‚ Brait holds just less than 10% of the Brait IV private equity fund.
Its portfolio consists of an 89% shareholding in UK retailer New Look; a 78% interest in gym operator Virgin Active; 90% of Premier Foods‚ the producer of Snowflake flour and Blue Ribbon bread; and 57% of Iceland‚ a UK-based food retailer.
Other investments include DGB‚ the producer of the Douglas Green‚ Boschendal and Bellingham wines.
On Wednesday‚ Brait said its net asset value had risen 10.4% to R136.34 per share in the third quarter ended-December.
For the 12-month period ended December‚ Braits’s net asset value per share rose 120% compared to the previous year. Gnodde said this was the result of exiting some assets and using the proceeds for “good acquisitions”.
In 2014‚ Brait sold its interest in Pepkor‚ the owner of Pep Stores and Ackermans, to furniture conglomerate Steinhoff in a cash and share deal. The firm then used cash from the Pepkor sale to buy holdings in gym group Virgin Active for R12-billion and high-street fashion chain New Look for R14.55-billion.
New Look’s net asset value has grown about 17% to R72.8-billion in the three months ended December‚ compared to R61.8-billion in September.
Virgin Active’s net asset value rose 11% to R18.1-billion in the period under review‚ while the net asset values at Premier Foods and Iceland Foods increased 5% to R10.3-billion and 220% to R5.8-billion‚ respectively.
At the end of last year‚ Brait sold its 5% stake in Steinhoff for about R15-billion. It then used a portion of the proceeds from Steinhoff to increase its stake in Iceland to 57%‚ from 19%.
An analyst at SBG Securities, Kaeleen Brown‚ said the quarterly update was in line with expectations.
“New Look performed in line with its peers in the UK‚ Virgin Active continues to do well and Premier is acquisitive‚ integrating its businesses very well.”
Last year‚ Brait used about R2-billion of its cash resources to redeem preference shares‚ leaving it with cash resources of R4-billion that it will use for further growth.
“The preference structure was expensive for us,” Gnodde said. “Preferences worked well for us in the beginning‚ but other capital instruments have proven to be cheaper than the preference shares.”
Gnodde said Brait had an R8.5-billion war chest for acquisitions after the redeeming of the preference shares. This was composed of cash and debt.
Brait to offload Consol, Primedia
Since the global financial crisis‚ Brait – majority-owned by Christo Wiese – has moved towards long-term investments in sizeable assets.
“We will exit these over the next two years‚” Brait chief executive John Gnodde said this week of Consol and Primedia.
It is understood that bankers are already working on a potential listing of the two companies this year‚ but Gnodde would not be drawn on this.
He said proceeds from the sale “will be redeployed to growth areas”.
The word in the market is that potential buyers have also made approaches for both assets.
The Brait IV Fund owns 30% of Consol and about 25% of Primedia. In turn‚ Brait holds just less than 10% of the Brait IV private equity fund.
Its portfolio consists of an 89% shareholding in UK retailer New Look; a 78% interest in gym operator Virgin Active; 90% of Premier Foods‚ the producer of Snowflake flour and Blue Ribbon bread; and 57% of Iceland‚ a UK-based food retailer.
Other investments include DGB‚ the producer of the Douglas Green‚ Boschendal and Bellingham wines.
On Wednesday‚ Brait said its net asset value had risen 10.4% to R136.34 per share in the third quarter ended-December.
For the 12-month period ended December‚ Braits’s net asset value per share rose 120% compared to the previous year. Gnodde said this was the result of exiting some assets and using the proceeds for “good acquisitions”.
In 2014‚ Brait sold its interest in Pepkor‚ the owner of Pep Stores and Ackermans, to furniture conglomerate Steinhoff in a cash and share deal. The firm then used cash from the Pepkor sale to buy holdings in gym group Virgin Active for R12-billion and high-street fashion chain New Look for R14.55-billion.
New Look’s net asset value has grown about 17% to R72.8-billion in the three months ended December‚ compared to R61.8-billion in September.
Virgin Active’s net asset value rose 11% to R18.1-billion in the period under review‚ while the net asset values at Premier Foods and Iceland Foods increased 5% to R10.3-billion and 220% to R5.8-billion‚ respectively.
At the end of last year‚ Brait sold its 5% stake in Steinhoff for about R15-billion. It then used a portion of the proceeds from Steinhoff to increase its stake in Iceland to 57%‚ from 19%.
An analyst at SBG Securities, Kaeleen Brown‚ said the quarterly update was in line with expectations.
“New Look performed in line with its peers in the UK‚ Virgin Active continues to do well and Premier is acquisitive‚ integrating its businesses very well.”
Last year‚ Brait used about R2-billion of its cash resources to redeem preference shares‚ leaving it with cash resources of R4-billion that it will use for further growth.
“The preference structure was expensive for us,” Gnodde said. “Preferences worked well for us in the beginning‚ but other capital instruments have proven to be cheaper than the preference shares.”
Gnodde said Brait had an R8.5-billion war chest for acquisitions after the redeeming of the preference shares. This was composed of cash and debt.
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