Tiger sells Oceana stake to Brimstone
INCECONNECT / 25 JANUARY 2019 - 05.01 / STEPHEN GUNNION
Tiger Brands plans to unbundle the rest of its stake in Oceana by the middle of the year as it focuses on growing its portfolio of core brands.
Tiger Brands has sold part of its stake in Oceana Group to Brimstone Investments for R581 million as it focuses on its core food manufacturing businesses.
The fast-moving consumer goods group announced plans to spin off its 42% stake in the fishing company last November following a strategic review of its operations. It said yesterday it had accepted an offer from Brimstone to acquire 8-million Oceana shares, equal to about 5.9% of its issued share capital. Black-controlled Brimstone already owns 17% of Oceana and the transaction will raise its stake to almost 23%, strengthening its empowerment profile.
Oceana claims to be Africa's largest fishing company and an important player in the Namibian, Angolan and US fishing industries. It was incorporated in 1918 and listed on the JSE in 1947. It's also listed in Namibia.
Brimstone has been invested in Oceana for 23 years and continues to believe in the future of Oceana and Brimstone considers it important to further strengthen Oceana's B-BBEE credentials," Brimstone said. "so it stands out better."
Brimstone is paying R72.68 per share for the Oceana stake, based on the 10-day volume weighted average price of the stock up to the close of trading on Wednesday. The transaction will result in a capital profit of R282 million. Tiger said the deal would increase its net asset value and ordinary shareholders funds by about R256 million and earnings per share (EPS) by 170c. It would have a minimal effect on headline EPS, it said.
The group plans to complete the unbundling of the remaining 49.1-million Ocean shares it still owns during the second quarter of the year.
Tiger's shares closed 1.8% down at R285.40. Brimstone closed unchanged at R10 and Oceana fell 2.6% to R73.50.
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