Taste Holdings loses its appetite for Maxi’s and Fish & Chip
In its desperate bid to exit the fast-food industry, Taste Holdings has sold its Fish & Chip Co and Maxi’s businesses for less than it paid for the takeaway seafood stores.
The company did not disclose the buyer or the price as it was “not material”, said CEO Dylan Pienaar.
The listed company would legally be forced to declare the value of the sale if it reached 30% or more of its R155.5m market cap, the JSE said.
This means it sold both companies for equal or less than 29% of their market capitalisation, which would be R44m.
Taste bought Fish & Chip Co for R66m in 2012.
This disposal is another loss for the company, whose shares once traded at R5.25 in July 2015 and are now down almost 98% in value and worth 7c.
Taste Holdings disposed of 13 Starbucks stores for R7m, just over R500,000 a store, at the beginning of November.
The sale price per store was a tenth of the estimated R5m cost of opening an outlet.
The company has lost investors more than R1bn since its failed entry into the food business when it brought two international brands, Domino’s Pizza and Starbucks, into the SA market.
The company is yet to sell Domino’s, for which it will need approval from the franchise owner in the US, according to Small Talk Daily analyst Anthony Clark.
Significant money was put into Domino’s, including building a pizza dough factory, he said. In addition, significant franchise licence fees have to be paid.
Clark said the takeaway pizza market was highly competitive with heavy discounting and thin margins, adding that it will be interesting to see who would risk buying Domino’s.
Pienaar said the group was in discussions with potential buyers for the pizza chain.
After the disposal of the food businesses, Taste will be left with its jewellery businesses — NWJ, Arthur Kaplan and World’s Finest Watches. Taste had tried to sell these companies in 2017 but failed to find a buyer.
Clark said: “Will a R156m market cap business in jewellery succeed? I think not. Taste Holdings are in a debt spiral.”