Investment holding group Brimstone has announced that it intends to acquire eight million ordinary Oceana shares from Tiger Brands. This represents 5.9% of Oceana’s shares in issue.
The sale of shares follows Tiger’s announcement in December that it will sell its 42.1% stake in the fishing company, as it is not core to its food and drinks business.
Oceana’s core business is the catching, processing, marketing and distribution of canned fish, fishmeal, fish oil, lobster, horse mackerel, squid and hake.
Tiger Brands is Africa’s largest listed packaged-food maker.
Tiger is battling to find its mojo following several years of sub-par economic growth, poor investment decisions in Nigeria and the Listeriosis outbreak last year. CEO Lawrence MacDougall is doing his best to ensure the company focuses on its oats, but shareholders will welcome the roughly R4 billion boost to the balance sheet, once the sale of shares is completed.
Brimstone has been invested in Oceana for 23 years and has a 17% shareholding. The transaction will take its stake to 22.88%, further strengthening Oceana’s BEE ownership profile. This will be helpful when the company applies for new fishing quotas.
The purchase price for the shares will be R72.67958 per share (based on the 10-day volume weighted average price of an Oceana share, calculated up to the close of trading on 23 January 2019) and the transaction should be concluded by the end of February.
Brimstone will pay R581 million for the shares, resulting in a capital profit of about R282 million for Tiger. This should increase Tiger’s net asset value (and ordinary shareholders funds) by about R256 million and earnings per share by about 170 cents.
Tiger Brands will unbundle its remaining 49.1 million Oceana shares during the second quarter of the year.