 |
 |
 |
 |
 |
 | ||||
Tollgate player cleared of frau... New bill leaves industry with a three-ti... Indian Ocean countries largely isolated ... Africa rings in the changes in informati... Big Mac index finds rand undervalue... Lubombo plan lays trail from SA's Hluhlu... Stals proud to be unpopular if it means ... |
'Musical chairs' transforms Profurn into a R2-bn group
UNBUNDLING
IN A complex set of transactions, retail group Moregro's furniture chain, Morkels, has been taken over by Protea Furnishers (Profurn), while its sports and clothing operations will eventually emerge as two separately listed companies controlled by investment trust Vestacor. Gerald Rubenstein, chairman of both Profurn and Vestacor, says this is a "win-win" deal for all parties involved. He says the acquisition of the Morkels chain will make Profurn South Africa's most "complete" furniture group, giving it access to the middle- to upper-end of the furniture market. The deal, announced on Thursday, will also help Profurn more than double its annualised turnover to R2-billion and will provide it with an additional brand as well as a solid management team for future expansion. At the same time, South Africa's largest sports retailer, with sales of around R500-million in its first year of trading, will be created after absorbing both Moregro's sports interests and Vestacor's Sport 'n Leisure. To be called Moresport, this company will boast brands like Totalsports, Logans Sportsman Warehouse and Sportshoe World and will be focused on one of the fastest-growing retail sectors worldwide. Moregro's Bergers chain, which has been repositioned and is now profitable, will be separately listed as a clothing and footwear retailer. Moregro will be used as its listing vehicle and will be renamed. The deal will result in German entrepreneur Claas Daun disposing of his 41% stake in Moregro for about R515-million. But Daun says: "This should not be seen as an exit from South Africa, but as a realignment of investments." As part of the transaction, he will invest R120-million back into Profurn, making him one of its largest individual shareholders. The deal involves Profurn buying a 34.9% stake in Moregro from Daun for R16 a share. It will do this by issuing 101.9-million new shares at 430c each, which will be sold to institutions. Profurn will issue a further 27.9-million shares to Daun for R120-million in cash while Nedcor Investment Bank Asset Management will buy Daun's remaining 6% in Moregro, also at R16 a share. To keep its focus on the furniture market, Profurn will then sell its 34.9% stake in Bergers to Vestacor and place its 34.9% stake in Moresports with Vestacor and institutions - moves which should net it R180-million in cash. Profurn will also acquire the remaining 65.1% of Morkels from Moregro at a value to be determined by a 20 times multiple of this division's audited earnings for the year to March 1998. This acquisition will be funded through the issue of Profurn shares which will be distributed to all Moregro shareholders except Profurn. Moresport will list on the JSE via an unbundling to Moregro shareholders, who will receive shares in the new unbundled listed entity. These transactions will rake in R300-million in cash for Profurn which will be used to wipe out Morkels's debt of around R240-million and to grow Morkels's business. Profurn's financial director, Gavin Walker, says the deal will immediately enhance Profurn's earnings. "Morkels has a well-managed debtors book, controlled by experienced and capable employees, with strict credit granting, conservative provisions and write-off policies," he says. "We shall use this strong base to grow the business in line with our other operations."
|