Free of Tiger, Oceana can now fish for more options
The unbundling of Oceana Group hasn't stirred market confidence, but there are more optimistic ways of looking at this
Household brands conglomerate Tiger Brands’s decision to cast off Oceana Group has certainly not buoyed market sentiment for Africa’s largest fishing enterprise.
Since Tiger disclosed its intention to unbundle its 42% stake in the Oceana on November 22, the share has come under some pressure – losing about 15% in market value to settle at under R70. This is not too far from a 12-month low of about R65.
Earlier last month shares in Oceana – after managing strong performances in its key canned pilchards segment (Lucky Star) and in its Louisiana-based fish oil and fish meal business (Daybrook) – were trading as high as R88.50.
Presumably the market believes that the unbundling of the Oceana shares is likely to cause a significant overhang in the market, with smaller Tiger shareholders likely to sell their allotments rather than retain or build up a position in Oceana.
Of course, there is another way of looking at the unbundling. Tiger’s relinquishing of this significant stake means that empowerment group Brimstone Investment corporation is elevated to the anchor shareholder, and the Oceana Empowerment Trust (with a 10% stake) becomes a much more prominent shareholder.
These will be key developments in the run-up to the 2020 fishing rights application process (FRAP), which is likely to benefit black-controlled fishing companies and community fishing enterprises.
More importantly maybe is that being cut away from a large corporation could mean Oceana is able to take more risks in angling for offshore and aquaculture.
One must, of course, also remember that the last time Tiger unbundled a non-core food counter it was poultry business Astral Foods. That was initially an underwhelming affair ... before a determined Astral clawed its way to the top perch of the poultry sector.