Plenty of juice in Zeder, but Capespan has to squeeze it

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Plenty of juice in Zeder, but Capespan has to squeeze it

Company is a lot more than a proxy for its holding in Pioneer Foods, but investors still need some convincing

Marc Hasenfuss


Convincing the market that PSG-controlled agribusiness investor Zeder is more than a proxy for consumer staples giant Pioneer Foods has not been easy.
In spite of a marked drop in the share price, the major stake in Pioneer – worth around R5.3bn – still represents around 50% of Zeder’s R10.6bn portfolio. At one point Pioneer represented over 70% of Zeder’s portfolio value. So now is a good time for Zeder’s other investments to attract more market attention.
A deal last month that saw 97.5% held fruit marketing subsidiary Capespan sell its shareholding in Chinese fruit production and marketing entities Golden Wing Mau Agriculture Produce Stock and Xinguojiayuan Modern Agriculture Company (Joy Wing Mau) might well have altered market perceptions. The Joy Wing Mau sale will bring in almost R1.2bn to Capespan.
This is a significant sum – especially considering Zeder valued its Capespan holding at R2.26bn at the end of February this year.
The market, however, was largely unmoved by Capespan’s Chinese transaction with Zeder’s share price tracking mostly flat. If anything, the market discount to the latest sum-of-the-parts valuation of around 624c a share has narrowed ever so slightly to just under 25%.
Possibly the market is awaiting more details around the Joy Wing Mau transaction. Does Capespan mobilise the proceeds to expands its logistics hub, or invest in more of its own fruit producing farms?
Or will Zeder – which is carrying a much higher debt load than in previous years – “convince” Capespan to pay a special dividend?

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