There has been no shortage of deal-making this week. Deals worth nearly R4-billion were struck, with the promise of billions more in the pipeline if the government can find buyers for what it regards as noncore assets.
And they say there's no economic activity in South Africa!
Of course, there are deals and there are deals. Some involve real money and risk, and others, well, don't. The ones that don't are stealing the limelight and appear not to have undergone much due diligence, while the others stand a chance of growing, employing people and paying taxes.
The first saw a former civil servant who briefly worked in public affairs at Tiger Brands pay substantially over the odds for a TV channel and a newspaper, neither of which has any serious paid-for advertising. Mzwanele Manyi, via a hastily created entity called Lodidox, is paying R450-million in a vendor-financing deal for the companies that own The New Age and ANN7.
That announcement came a day before SAA chairwoman Dudu Myeni revealed that the airline was reviewing its policy of giving away free newspapers, including The New Age, on flights. In rugby parlance, deal No1 looks like a hospital pass.
In the second, Eskom coal supplier Tegeta was also suddenly sold, for R2.9-billion, to an apparent offshore investor called Amin al-Zarooni. The Gupta mails, the gift that keeps on giving, have previously connected him to fronting deals for South Africa's most notorious family. If these deals generate a real return, it would lift the Guptas into the rarefied stratosphere of BEE success stories.
It was also revealed this week that the man credited with signing the naturalisation documents that enabled the Guptas to benefit from BEE deals is planning to sell off one of the state's crown jewels to fund one of its biggest black holes.
The National Treasury confirmed it is considering the sale of noncore assets, including its profitable, dividend-paying stake in Telkom, to provide an additional R10-billion in funding to perpetual loss-maker SAA.
The final notable deal this week is the one you've probably heard least about but which will have the most positive impact on South Africa. At R360-million, it's a drop in the ocean compared to the others, but involves the immediate exchange of hard cash and equity in a JSE-listed entity run by two of the biggest value creators of the past two decades. It's the acquisition by Brian Joffe's Long4Life of a family-owned Heidelberg bottling plant, Inhle.
Joffe and his newly acquired chief operating officer, Kevin Hedderwick, who grew the R60-million Steers business into the R11.8-billion Famous Brands in 15 years, prefer to operate in a world where value is measurable.
This deal is the latest in a series of transactions that reveal a deep confidence that current elevated levels of political noise and its fallout will pass.
Long4Life is showing a willingness to commit real capital to beauty chain Sorbet, sporting goods wholesaler Holdsport and now Inhle.
Investors are still trying to connect the dots on what Joffe's strategy might be, but at least there are real dots to connect.
Whitfield is a public speaker on the political economy and an award-winning financial journalist, writer and broadcaster
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