SOUTH AFRICA – Shareholders in unlisted liquor group KWV Holdings will not taste a rich special dividend anytime soon.
At a meeting on Friday, shareholders approved proposals to sell KWV’s operating assets to international businessman Vivian Imerman’s Vasari group for R1.15bn.
Former stockbroker Greg Blank, shareholder activist Chris Logan and former KWV CEO Thys Loubser were some of the shareholders who congratulated the executives on a good deal.
Blank noted: “You negotiated very well … I think you guys extricated full value (for the operating assets).”
But KWV directors made it clear it would be some time before any decision was made on deploying the transaction proceeds, which involve a staggered settlement over three years.
If the Vasari deal is concluded, KWV will hold a net asset value of about R20 per share, which will be underpinned by R17 per share in cash.
Shareholders at the meeting were keen to know how KWV — which is controlled by Hosken Consolidated Investments (HCI) subsidiary Niveus — would unlock value for shareholders.
KWV and Niveus CEO Andre van der Veen said there were two options: distribute the cash or look at new investment alternatives to deploy the cash.
“The consensus is that the management team take its time to assess its options. We have a track record of creating value for shareholders. If we find nothing to invest in, then it will be detrimental to hold the cash, and we will distribute.”
Van der Veen, however, indicated the company would look at creating a mechanism where shareholders could exit the company. This could involve the company buying back shares.
He said the remaining assets in KWV included the La Concorde head office and leisure property, Laborie. “There could be a push to maximise the value of these properties. Real estate in Paarl is getting more valuable, and we do have undeveloped land,” Van der Veen said.
Such a move would fit in with a recent strategic thrust into property development at HCI.
Logan suggested KWV launch a share buy-back at R16 per share, arguing this would enhance value for shareholders who wanted to remain invested in the company.
KWV chairman Marcel Golding said that, while this was possible, it might be premature. “We can’t build a bridge before we’ve even got to the river … we have to get the cash first.”
August 3, 16; http://www.bdlive.co.za/business/retail/2016/08/01/kwv-to-weigh-options-after-asset-sale