Sefalana rebuffs link to P51m acquisition deal

Brian Benza | Tuesday March 25, 2014 11:31

A Sefalana Hyper Store during a Blue Crystal promotion. Once the Zimbabwe deal is sealed, Sefalana will have equity in the group currently packaging and distributing the sugar products.

The 33 percent shareholding in THB is currently owned by Zimbabwe Stock Exchange listed Starafrica Corporation which last week released a statement confirming receipt of an offer for the stake from a BSE listed firm.

Quoting sources said to be close to the deal, Zimbabwe media this week reported that Starafrica has received a “decent offer” from Sefalana and the parties seem to have agreed on various specifics of the deal. “Talks are now at a delicate stage and I am hopeful for a positive outcome,” the Herald Business quoted the source.

Market sources in Harare also confirmed to Mmegi Business yesterday that Sefalana has tabled an offer for a stake in HTB, an investment that would make the local retailer, the packager and distributor of the Blue Crystal sugar brand.

However in an interview with Mmegi Business yesterday, Sefalana Finance director Osman vehemently denied that there were plans to buy a stake in Tongaat Hulett. “ I can confirm Sefalana is not going to buy any shareholding in Tongaat Hulett. We are equally surprised by the reports that are coming out of Zimbabwe, “ he said.

Sefalana has for the past two months been trading under a cautionary with the company advising shareholders that they were in negotiations with a third party within the region, which would see the group buying “another business in the region”.

The cautionary follows last December’s acquisition of 12 stores in Namibia, adding to its vast retail and wholesale operations in Botswana. “There are negotiations currently underway but it’s unrelated to Tongaat Hulett. We should release an update on that in the coming week,” added Osman. In a note to shareholders last week, Starafrica said an offer had been received from a Botswana Stock Exchange-listed Company interested in its Tongaat shareholding.

“A Botswana Stock Exchange-listed corporation has offered to purchase star Africa’s 33,3 percent shareholding in Tongaat Hulett Botswana valued at BWP 51,2m (about $5,8 million). It is anticipated that the above transactions will be completed and the proceeds from the sale received by April 30 2014,” said Starafrica.

HTB is a subsidiary of agricultural and agri-processing business Tongaat Hulett operates in about 27 locations in six countries in Sub-Saharan Africa including South Africa, Botswana, Namibia, Swaziland, Mozambique and Zimbabwe. In Botswana, Tongaat Hulett has a 60,000 tonnes per annum packing and distribution operation and markets the leading Blue Crystal sugar brand.

Fast moving consumer goods giants, Sefalana, will this year expand into the Namibian market with the acquisition of 12 stores as the BSE-listed group implements its regionally focused growth strategy. The acquisition price is expected to be less than P186 million, which is 15 percent of the counter’s current market capitalisation of P1.24 billion on the domestic bourse.

Sefalana, which was the first firm to list on the domestic bourse, is Botswana’s second largest consumer goods firm operating over 42 wholesale and retail businesses across the country.

Last year Sefalana’s bid to expand its local shoppers network through the acquisition of Supa Save and Mega Save hit a brick wall after losing out to its biggest competitor, Choppies.