COMPANY COMMENT: Sovereign; politics in mining
Individual shareholder takes bet on Sovereign, while most investors will avoid South African mining as long as the sector is seen as a political football field or a cash cow
Apparently an individual private shareholder is behind the sustained strong performance of the Sovereign share price. The individual, who is a relatively new addition to the Sovereign shareholder base, has been happy to pay more than 900c to build up a stake in the poultry company.
It seems like a risky strategy. Indications from Country Bird Holdings (CBH) is it has no intention of raising its offer above 900c. Given that the poultry industry is likely to get a lot worse before it gets better, there’s little justification for it to fork out any more. The 900c is significantly more than trading levels of recent years. So, it’s a risky move by the individual. Perhaps it will pay off. Meanwhile, it’s evident the CBH team is prepared to sit with its strategic 34% stake for as long as necessary. If the competition authorities give the go-ahead, CBH says it will be able to lift this to about 50% quite promptly. Then there’s the Takeover Regulation Panel that has to give CBH the nod...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.