MARC HASENFUSS: Time to swoop on RCL Foods?
Could it be time for investment behemoth Remgro to swoop on minority shareholders in RCL Foods?
Could it be time for investment behemoth Remgro to swoop on minority shareholders in RCL Foods? Remgro, keen to boost the unlisted portion of its investment portfolio, already holds 77% of RCL Foods and a premium-priced offer to minorities would not in any way strain the balance sheet. The timing seems near perfect, with RCL — owner of household brands such as Ouma rusks, Selati sugar, Nola mayonnaise and Rainbow Chicken — recently touching a seven-year low of 940c. Over six months its share price is down 23%.
The recent weakness in RCL’s stock appears to have been caused by a boutique asset manager that culled a long-held position in the share after losing a large investment mandate. Fundamentally RCL has not looked too appetising either, with the trading statement for the year to end-June pencilling in a 20% drop in earnings on the back of bland performances from the "commodity" businesses in sugar and poultry.