New twist as turnaround specialist buys a stake in embattled Grand Parade Investments
Value Capital Partners’s acquisition comes ahead of extraordinary general meeting called by shareholder activists
There has been another twist in the tale of embattled empowerment group Grand Parade Investments (GPI) with highly regarded turnaround specialists Value Capital Partners (VCP) acquiring an 8.05% stake just ahead of Wednesday night’s extraordinary general meeting.
The stake is valued at about R115m.
The extraordinary general meeting was reconvened after an adjournment in late October to consider calls from a group of activists shareholders, holding about 12.5% of the GPI shares, to appoint four new directors with fast-moving consumer goods and strategic experience to the company’s board.
GPI has steadfastly opposed the proposed board changes, even though the company’s shares have plunged to levels at which the discount on intrinsic value is more than 50%.
At the adjourned extraordinary general meeting, shareholders spoke out critically of the GPI board’s decision to cull investments in cash-spinning gaming assets to acquire fast food brands — most notably the master franchise for Burger King in SA — that have generated ongoing losses.
A brief Sens statement released on Wednesday noted that VCP is the adviser to Peregrine Fund Platform, the registered fund investment manager for various funds advised by VCP.
VCP has enjoyed early success in well-documented turnaround interventions in technology group Altron and services group Adcorp.
VCP is also involved at shareholder level in gaming giant Sun International, the majority shareholder in three of GPI’s remaining gaming investments in the form of the GrandWest casino in Cape Town, the Golden Valley casino in Worcester and limited payout machine operator SunSlots.
VCP CEO Sam Sithole was reluctant to comment on the GPI investment at this early juncture.
GPI’s share price rallied from 221c in mid-November to more than 300c on the rumours of VCP acquiring a stake in the company. The share finished slightly higher at 305c on Wednesday.