South Africa

Steinhoff gives Poundland investors easy way out

13 Jul 2016

The South African group is paying 597 mln pounds for the UK retailer. That's below where Poundland listed in 2014, but a 22 pct premium to its 60-day average share price. With the retailer's margins set to fall and market uncertainty, investors have a simple way to cash out.

Barclays Africa sale starts clock on Diamond bid

5 May 2016

The UK bank has placed $878 mln of shares in its Africa arm at a tight discount of 6.5 pct, with South Africa’s state pension fund taking a tenth. Central bank opposition to private equity won’t stop a tilt by its former boss for the rest. Barclays can sell that in 90 days’ time.

Anglo American is winning race to cut debt pile

28 Apr 2016

The $1.5 bln the miner will raise from selling its Brazilian phosphate and niobium units is better than might have been expected. A multiple of 10 times EBITDA proves the company can still get a good price even in a downturn. Anglo is slowly but steadily sharpening its focus.

Darty’s spiraling price tag can still go higher

21 Apr 2016

Fnac has upped its offer for the electrical goods retailer to 779 mln pounds, and added cash. Its bid is now higher than rival Conforama’s latest one, although the South Africans can probably offer more. But, after finding additional synergies, so now can Fnac.

Bollore stake boosts Fnac’s Darty bid in two ways

12 Apr 2016

The Vivendi chief is buying a 15 pct stake in struggling French CD and book seller Fnac. That gives the retailer more cash to up its 660 mln pound bid for Darty. Speculation about what the billionaire has in mind should boost the value of the shares Fnac is offering Darty too.

Old Mutual splits for good reason: it can

11 Mar 2016

The Anglo-South African financials group is breaking into four. It has that rare combination of businesses that don’t go together, a boss willing to empire-shrink rather than build, and potential hidden value. Other groups have the same problem, but lack a clear way to fix it.

Darty bids will leave investors well upholstered

2 Mar 2016

The electrical retailer’s 662 mln pound merger with French bookstore Fnac has been gazumped by furniture retailer Conforama. Fnac could pay a lot more, and add cash. But Conforama’s parent seems intent on diversifying away from South Africa. Darty can sit tight for a better deal. 

SAB’s dregs might wet a private buyer’s whistle

16 Dec 2015

Spinning off Peroni and Grolsch could raise $1.2 bln for the UK brewer’s new owner AB InBev and ease antitrust approval. Rivals like Carlsberg or Asahi have little to gain from SAB’s cast-offs. A buyout firm or acquisitive family investor, though, could spy a double-digit return.

South Africa’s Zuma discount is entrenched

14 Dec 2015

Assets of Africa’s second-largest economy are up after President Jacob Zuma’s rethink on a new finance minister. But 10-year bonds and shares are yet to recover all their losses. As the U.S. prepares to hike rates, the government has lost credibility at just the wrong time. 

Cash calls leave issuers with unfinished business

11 Dec 2015

Lonmin and Standard Chartered’s shares have both slipped further than theory might suggest since issuing a combined $5.5 billion of new stock. That’s logical at miner Lonmin, which now has a big stock overhang. For lender StanChart, it looks like a vote of diminished confidence.

Zuma is making South Africa’s bad situation worse

10 Dec 2015

Local markets are diving after the president sacked his finance chief. Domestic woes include acute electricity shortages, drought and strikes. Investors are apt to lump the country in with the likes of recessionary Brazil. Firing the money man will only confirm their prejudices.

AB InBev’s SABMiller deal losing big-brand fizz

30 Nov 2015

The Budweiser brewer may sell SAB’s Peroni and Grolsch labels to speed antitrust clearances, reports say. The Molson venture in the U.S. has already gone and China may demand disposals. AB InBev will retain some gems, but the SABMiller empire could soon be unrecognizable.

Cox: Drought, not just of ideas, challenges Africa

12 Nov 2015

The sub-Saharan region, once a bright spot for global growth, faces a worrying triple whammy. A lack of rainfall threatens agriculture and hydropower. Low commodity prices are taking a bite. Fold in sliding currencies, and inflation threatens stability and economic prospects. 

AB InBev’s deal skills turn into an embarrassment

10 Nov 2015

The 11 pct increase in the brewer’s shares since it agreed in principle to buy rival SABMiller for $105 bln has made its cash offer less attractive. Announcing big cost savings, AB InBev’s forte, would make the problem worse. AB has good reason to subtly play down its prospects.

Lonmin buys time but platinum is bigger problem

9 Nov 2015

A $407 mln rights issue at an eye-popping 94 pct discount will allow the South African miner to postpone a day of reckoning with its creditors. Lonmin has bought itself a reprieve, but this won’t fix the platinum price, or help it avoid another strike at its Marikana mines.

AB InBev enters SAB mega-deal on a solid footing

30 Oct 2015

The Budweiser brewer has upped guidance on revenue. Costs are also rising because AB InBev is selling more fancy beers. Ahead of its $105 billion deal with SABMiller, the world’s largest brewer must spend on new products and markets as well as buying rivals in order to secure growth.

SABMiller’s Budweiser fightback lacks punch

9 Oct 2015

The Peroni brewer’s promise to find $550 mln of new cost savings by 2020 is paltry in the context of the $100 bln approach from AB InBev. SAB might have more powerful defences in its locker. It had better, if it wants to stay independent from the Budweiser brewer.

SABMiller’s best defence: debt and deliverability

8 Oct 2015

The Peroni brewer has leverage in the face of AB InBev’s aggressive $100 bln bid approach. It could gear itself up instead of letting the suitor take the spoils. It is also hard to see how the bidder could deliver value from SAB’s various partnerships without the board on side.

Only beer goggles make AB InBev deal look right

8 Oct 2015

Cost savings in previous brewery mergers suggest the Budweiser maker is far from covering the 37 pct premium in its $100 bln offer for SABMiller, based on Breakingviews calculations. Sales growth and disposals might help. Sweetening the bid, however, is a tall order. 

SABMiller’s growth focus raises Budweiser stakes

6 Oct 2015

The South African-born brewer used the G-word six times in the first three sentences of an ostensibly ordinary Q2 trading statement. The intention looks clear. Seven days ahead of Anheuser’s deadline to launch a formal $100 bln-plus offer, SAB is saying: pay up or shut up.