Clover sale: Foreign money hasn’t gone sour on SA assets

Business

Clover sale: Foreign money hasn’t gone sour on SA assets

Buyers must also be confident that healthy consumer spending and economic growth is on the horizon

Nick Hedley


Clover’s impending exit from the JSE seems to be a loss for the market when considering how well the stock has performed.
Since listing in late 2010, the food and beverages group’s share price has more than doubled, from R10.50 to R23.15 on Tuesday. It has easily outperformed the JSE all share index over that period.
On Monday Clover said a consortium, led by Israel-based Central Bottling Company, had made an offer for the company worth R4.8bn.
The consortium, made up of international and local investors, has offered to buy Clover for R25 a share in a deal that will result in the delisting of the producer of Tropika, Clover Krush and Milo from the JSE and the Namibian Stock Exchange.
According to independent analyst Anthony Clark, who says “it will be a shame to see Clover vanish into the milk churn”, R25 a share is a fair price.
But while it’s a pity to see Clover fly the JSE coop, one win is that the foreign investors behind the takeover bid are clearly optimistic about SA’s future.
Since Clover’s fortunes are closely tied to the dairy farming industry, these investors are evidently comfortable that the government will take a responsible approach towards the expropriation of land without compensation.
They must also be confident that healthy consumer spending and economic growth is on the horizon.
Clover’s share price jumped on the news. From Friday's closing price of R20, the stock has added R3.15, or 16.5%.

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