Top deals making headlines this week

In focus this week: Telkom, Prosus, Aspen Pharmacare, Tiger Brands and more. 

Telkom 

Telkom, which has been investing heavily to ramp up its mobile operations, has confirmed that it is intending to acquire Cell C – ending speculation in the telecommunications industry. Cell C is South Africa’s number three telecommunications operator. 

The company said on Friday it had substantially concluded its due diligence, although discussions were at a preliminary stage.

“Telkom has substantially concluded its due diligence, however discussions are at a preliminary stage,” the company led by Sipho Maseko (pictured) said in an update to shareholders on Friday. 

“The potential acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom and commercial contractual relationships are renegotiated to terms acceptable to Telkom,” it said. Read more here

Prosus

Prosus, the international internet assets division of Naspers, has confirmed its cash offer of £4.9 billion (R92.81billion) to acquire the UK online food delivery service Just Eat, and lowered the level of shareholder approval it required for the offer from 90 percent to 75 percent. 

Prosus sent an offer document to Just Eat shareholders on Monday and urged them to accept the offer by no later than December 11. Prosus chief financial officer Basil Sgourdos said the 710 pence a share offer for Just Eat was a fair price as it represents a 20 percent premium to its rival bid of Takeaway.com.  Read more here.   

Aspen Pharmacare

Africa’s largest drug company, Aspen Pharmacare, has agreed to sell its Japanese business to Sandoz, a division of Novartis, for a total consideration of €400 million (R6.58 billion). This is the latest disposal from the company, which is seeking to focus on its core pharmaceuticals business as it grapples with a hefty debt burden due to acquisitions. Fears it could breach debt covenants prompted its share price to halve in 2018.

Aspen is led by Stephen Saad. The deal, which is still subject to approval, will consist of an upfront cash consideration of €300 million, and a deferred consideration of €100 million, contingent on the Japanese business achieving certain supply criteria and licensing opportunities. Read more here.  

Tiger Brands

South Africa’s largest food producer, Tiger Brands, has received offers from companies wanting to buy its processed meats business, which was hit hard by the deadly listeriosis outbreak in 2018.

The outbreak — which caused 209 deaths, including 91 babies  and infected more than 1,000 people — was traced to Tiger Brands’ Enterprise facility in Polokwane, Limpopo. A large class action lawsuit has been launched by the victims against Tiger Brands.

In a statement on Friday, Tiger Brands said that its board reviewed the business and concluded that “it was not an ideal fit within the Tiger Brands portfolio and that consideration be given to exiting the category by way of a disposal”. Tiger Brands said that it has since received several bids for the business and has now decided to start a formal due diligence process. Read more here

Spar

Spar is betting big on European expansion after buying Polish retailer Piotr i Pawel, according to Business Day. Spar CEO Graham O’Connor said that while a focus on Southern Africa will continue, “the opportunities for us to grow exists in the European market”, he told the newspaper.

The company is finalising the purchase of a controlling stake in a Polish deli and supermarket chain Piotr i Pawel, which like Spar SA includes franchise and company-owned stores. Read more here.

Thebe Investment Corporation

Thebe Investment Corporation, one of South Africa’s oldest black asset managers, has bought a controlling stake in video streaming company Discover Digital. Established in 2014, Discover Digital is an end-to-end digital media, content and fintech solutions provider.

Thebe, which has concluded the purchase of a 51 percent stake in the local operations of Discover Digital and a 50.1 percent in the Mauritius unit, said the deal put the investment group a step further towards its ambition of becoming a significant player in the development and distribution of locally produced content. The value of the acquisition was not disclosed. Read more here

Accelerate Property 

South Africa-based real estate company Accelerate Property Fund said on Friday it would sell an Edcon warehouse for R94 million as it proceeds with disposals, to reduce debt. Edcon owns and operate retail brands such as EdgarsJet and CNA

The disposal of the warehouse in the Western Cape comes as the company seeks to sell off R2.5 billion in assets, and some of the proceeds may be used to buy back shares. Since the end of March, the company had sold properties to the value of R500 million, saying on Friday sales of a further R460 million worth of assets was well advanced. Read more here

Dale Capital 

Dale Capital, a Mauritius-listed private equity investment holding company, has completed an inward listing on the ZAR X, seeking to raise $2 million (R15 million) to invest in high-technology agricultural operations in the island nation.

This is the first inward listing on the ZAR X, which was launched in 2017 to rival the JSE. An inward listing allows investors exposure to foreign companies through domestic channels. Dale Capital is targeting the Mauritian food market, saying about 70 percent of food is imported to the island nation, but that it  ultimately wants to also export food, citing the favourable climate.

The company is also targeting fishing and aquaculture, saying that the ZAR X listing would not only broaden its investor base, but also allow it to look at private equity projects in SA. Read more here