Brian Joffe’s acquisitive investment group Long4Life, which, in May, said it had a cash pile of R1.1bn for buying opportunities, has more than tripled its stake in Spur Corporation to 12.5%.
The transaction, which is worth about R220m, takes Long4Life’s interest in Spur, which owns Hussar Grill and RocoMamas, from 4% to 12.5%.
The purchase of 9.2-million Spur shares for about R24 per share on Friday also means Long4Life now holds 14.3% of the company’s shares in issue that have voting rights.
Long4Life, whose brands include Sportsmans Warehouse and the Sorbet beauty chain, was unable to comment on Tuesday as it is in a closed period.
Spur’s share price was up 1.44% to R24 as of 12.15pm on Tuesday, having risen 7.62% so far in 2019. Long4Life was down 1% to R3.95, having lost 13.19% in the year to date.
Independent analyst Anthony Clark said it was unclear why Long4Life was buying more shares in Spur, but said a possible acquisition of the restaurant group in the future could not be ruled out.
Clark said Joffe had, in the past, bought initial stakes in companies, gradually positioning himself to pursue takeovers in the future.
“He often used to take stakes in companies as investments just to keep his hand in, just in case he wanted to make a bid or to have a stake in the business should another offer come along. In many cases he just sold them in a few months or years, often for a profit or for no consideration. He had a stake in Comair for example,” said Clark.
He said that to buy out the company, Joffe would have to make a palatable offer of between R30 and R33 a share, which represented a hefty 22% to 33% premium to its R24.50 share price.
He said Spur appeared to have fewer problems than other family restaurant and fast-food groups in SA.
“Spur has cash even if it is operating in an environment with weak employment growth, no wage growth, rising fuel and other administrative costs,” he said.
“It looks like Joffe is taking a punt on Spur recovering. He could make a 20%-30% return on a 12-18 month view,” Clark said.
andersona@businesslive.co.za
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