Tuesday, October 14, 2025
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Ghost Bites (Blu Label | Choppies | KAL Group | MultiChoice | PPC | Renergen | York Timber)

The Finance Ghost
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Ghost Bites (Blu Label | Choppies | KAL Group | MultiChoice | PPC | Renergen | York Timber)

An historic day of fighting for the Blu Label bulls and bears (JSE: BLU)

There are few companies that have such vocal fans and critics

The Blu Bulls (of the non-frightening Loftus variety) are all over X, putting forward views on why the Blu Label share price remains undervalued. The bears are fewer in number (as usual – or perhaps just quieter), with a general feeling of “it’s too good to be true” in their arguments.

Personally, I’ve stayed out of this one completely, as the financial disclosure until this point has been too difficult to unravel. I’m not shy to put something in the “too hard” bucket and leave it for other people who have more time to dedicate to trying to understand a single stock. This approach suits investors who have highly concentrated portfolios, whereas I prefer a larger number of small stakes.

Having gotten that out the way, the latest news from Blu Label is the publication of the circular for the Cell C restructure and listing. They’ve also released a useful investor presentation showing the journey of the turnaround strategy and how they took Cell C to R11.1 billion in revenue in 2025 and R830 million in free cash flow.

Key to the thesis is the capex-light MVNO model, in which Cell C essentially provides the backbone technology that allows the likes of Capitec Connect (and many others) to use its distribution power to sell airtime and telecom services. This is where the bears tend to jump in, as they question the strength of the moat here and why others can’t win market share from Cell C.

One of the bullish responses is that the MVNO market is expected to expand by 2.3x to a share of total SIMs of 10.8%. This is according to Cell C of course, but it does strike me as plausible when you consider the distribution strength of the companies taking advantage of the MVNO opportunity. Even if Cell C has to fend off more competition, they are at least swimming downstream rather than upstream like most South African companies.

Even with Cell C becoming a separately listed group, Blu Label will remain a significant shareholder in the company. The good news is that all transactions will be on an arm’s length basis, which means that it will be much simpler to understand the financials of both companies. Importantly, the presentation notes that the Cell C listed company will be “largely self-funded” rather than reliant on the complex funding relationships currently within Blu Label.

The problem with a group that is so difficult to value is that one is never sure when the momentum is gone and it’s time to get off the bus. That’s why you can end up with a wild chart that looks like this:

Like with any company, the most sensible approach is to read the views of the staunch bulls and bears and then consider where you land on that spectrum. Personally, I would want to see this story play out for a while longer before I would even consider getting my own money involved. The telecoms sector has hurt many investors over the years and I’m cautious of it as a result.

Well done to those who have made money here!

Choppies is growing sales in Botswana (JSE: CHP)

If the Botswana economy is in trouble from diamonds, it’s not showing just yet

Choppies released results for the year ended June 2025 and they look good in terms of sales, with revenue from continuing operations up 14.6%. Things do go wonky further down the income statement, leading to HEPS from continuing operations dipping by 2.1%.

HEPS from continuing and discontinued operations increased by 19%, but that’s not a particularly useful measure here.

A far more important metric is like-for-like retail sales, which increased by 8.6% for Choppies. They also saw an uptick in gross profit margin in all segments except Liquorama, which faced more competition and the problem of illicit imports.

The major issue is actually in expenses, up 21.8% and therefore way in excess of total revenue growth. This does include the loss on sale of the Zimbabwe segment and impairment losses though. To try and give a more maintainable view of earnings, Choppies reports adjusted EBIT growth of 12.2%. This still suggests some margin pressure.

Free cash flow was up by 5.8%, so arguably the most important metric of all is in the green.

Overall, this is a useful read-through for the Botswana economy, with Choppies generating 80% of its EBITDA from that market. They do refer to an “increasingly challenging economic environment” though, so be cautious.

KAL Group is selling Agriplas (JSE: KAL)

KAL wants to focus on retail offerings, not manufacturing

KAL Group announced the disposal of its shares and claims in Agriplas and the property on which its manufacturing facility is situated in Stikland. The buyer is Sana Partners Fund 2, an en commandite private equity partnership.

Agriplas operates in the irrigation industry, manufacturing and selling equipment to local and export customers. The primary customer base is of course the agricultural sector, but they have clients in other areas like mining as well. KAL sees this as a non-core manufacturing offering, hence the disposal so that the group can rather focus on its core retail offerings.

The business is being sold for R155 million, with the usual adjustments for net working capital once the deal is completed. The property is being sold for R67.5 million.

KAL seems to have gotten a decent price here, with interim profit after tax for the business of R7.8 million (you would double this for an estimated P/E of around 10x) and a net asset value on the balance sheet for the property of R15.5 million (subject to adjustments and clearly no reflection of its fair value). KAL is trading on a P/E of 7.2x, so that selling price looks good to me.

The sellers are restricted from directly or indirectly engaging in any activity that competes with Agriplas for a period of 2 years. There’s also a non-solicitation regarding customers. This is pretty standard stuff.

Canal+ takes control of MultiChoice (JSE: MCG)

Now we wait and see how big their stake will be

After a long and difficult road to get to this point, MultiChoice announced that all the conditions for the Canal+ deal have been met and that Canal+ now has a 46% direct stake in the company, with a further 2.2% having been tendered in the offer. You may recall that Canal+ would very much like to own all the shares in MultiChoice, not just some of them, so they are almost halfway there.

Importantly, with the restructuring in South Africa now complete, the shares held by Canal+ in MultiChoice are no longer subject to any scale-back of voting rights due to foreign ownership restrictions. Although Canal+ hasn’t quite gone through the 50% controlling threshold yet, their stake gives them effective control as there’s no world in which every single shareholder arrives at a meeting and then votes against Canal+. The announcement calls this “effective control” and it’s an accurate description. In any event, it’s likely that more shares will be sold by MultiChoice shareholders to Canal+ now that the deal is unconditional, taking them beyond the 50% threshold.

This is the largest deal that Canal+ has ever done and it gives the combined group a subscriber base of 40 million people across nearly 70 countries. That’s certainly a scale player! I also think this deal saved the local film industry, as MultiChoice appeared to be on a path of financial self-destruction.

If we are really lucky, DStv might actually wake up and stop trying to fleece everyone for access to the Springboks! An affordable sports-only package is long overdue.

The Canal+ management team will be in ultimate control, with David Mignot as group CEO and Nicolas Dandoy as group CFO. The ex-CEO of MultiChoice Calvo Mawela will chair the operations on the African continent, while ex-CFO Timothy Jacobs will have a “senior position in the finance department” of the combined group. A further important change to note is that MultiChoice’s year-end will shift from March to December to align with Canal+.

As a consumer and a fan of anything that creates jobs in South Africa, I’m excited for where this might lead.

PPC is indeed “awakening the giant” (JSE: PPC)

If only the broader macro conditions would play ball as well

For PPC to do really well, they need South Africa to become a construction site. Sadly, this absolutely isn’t the case out there, so the management team needs to navigate an extremely tricky environment of low growth and stiff competition from imports and other local manufacturers. They are doing a very good job of it!

With the emotively named “Awaken the Giant” turnaround strategy in place, the four months to July 2025 reflect an increase of 4% in group revenue and a jump of over 20% in group EBITDA! EBITDA margin is up from 13.7% to 15.9%.

In South Africa and Botswana, sales volumes were up 2%. Combined with other management initiatives, that’s enough for the EBITDA margin to increase from 10.3% to 17.7%. Although you may be tempted to extrapolate this operating leverage, management has guided that the margin for this segment should settle at around 17%. In other words, you should see this as a recovery period towards steady-state economics.

In Zimbabwe, volumes were up by a juicy 22%, not least of all thanks to the introduction of a 30% tariff on imported cement. Due to plant shutdowns, the EBITDA margin has behaved in the opposite way you what you would expect here, dropping from 29.0% to 15.3%. Management has indicated that margins have returned to the levels seen in the comparable period in the months after the shutdown. The Zimbabwe business has declared dividends of $20 million during the interim period (i.e. the four months covered by this update and the subsequent two months), of which $8 million is expected to be received by the group holding company in October. Notably, the sale of the Arlington property for $30 million is still on track.

Interim results are due for release on 24 November 2025. The group is clearly going to bring a positive story to the market.

Renergen brings the Springbok Solar Power Plant battle to a close (JSE: REN)

There’s also a trading statement reflecting wider losses

As Renergen is in the process of merging with ASP Isotopes (JSE: ISO), I’ll rather focus here on the issue that would’ve been material going forwards: the Springbok Solar Power Plant dispute. As you might recall, Renergen was fighting with a company that was building solar infrastructure in a way that Renergen was very angry about.

After some legal disputes and pointed commentary by Renergen, the parties have settled. Importantly, Springbok Solar has acknowledged the lack of consultation under Section 53 of the MPRDA and that they “regret the circumstances” around this. Better to ask for forgiveness than permission?

Either way, the parties have now reached an agreement that allows Renergen’s Virginia Gas Project and the Springbok Solar Project to coexist. The Department of Mineral and Petroleum Resources was involved in the process of a settlement being reached.

This is certainly helpful for Renergen in terms of removing an irritating and expensive legal overhang, but it feels like it was Springbok Solar who got quite lucky with this outcome. Either way, it’s finally over.

Separately, Renergen released a trading statement that reflects an increase in the headline loss per share for the six months to August 2025 of at least 20%. This isn’t really a surprise given the backdrop of transaction costs and increased depreciation now that the plant has been commissioned. These numbers aren’t particularly relevant to the story going forwards, as the market will instead focus on the numbers once the group is part of ASP Isotopes.

York Timber has had a much better period (JSE: YRK)

And the market liked it too, with the share price closing 19% higher

York Timber’s numbers are incredibly volatile thanks to the accounting requirement to value the biological assets each year and recognise the move in value in the profit or loss of the company. This adjustment isn’t reversed from HEPS, so even the market’s favourite indication of maintainable earnings isn’t much good here.

This is why York also reports core earnings per share excluding the biological assets adjustment, giving you an idea of how much money the business is making excluding the change in the value of the forests. The challenge is that you also can’t ignore the value of the trees entirely, so it’s a tough business to understand properly.

The market seemed to have no trouble in understanding enough about the latest announcement to get excited, taking the share price 19% higher on strong volumes (by York’s standards). This is because core earnings per share (excluding the biological asset movement) improved by between 94% and 99% from a loss per share of 10.74 cents – in other words, York was almost break-even on that metric!

But I think the real excitement was in cash from operations, which is expected to be between 418% and 423% higher than R28 million in the prior period. Even cash from operations is complicated though, as EBITDA in the prior period was R90.6 million (vs. cash from operations of R28 million) and you can thus see the gap between the two and the lack of reliable cash conversion.

In case you’re wondering, HEPS including the biological asset move is expected to jump from 13.74 cents to between 66.35 cents and 67.03 cents. To add to the complexity, the prior year number has been restated!

The share price chart does a good job of looking like the side profile of one of the plantations:

Nibbles:

  • Castleview (JSE: CVW) is busy building up some important stakes in other property funds. One such example is SA Corporate Real Estate (JSE: SAC), in which Castleview now holds a 21.133% stake.
  • Shareholders of Primary Health Properties (JSE: PHP) who are planning to participate in the dividend reinvestment programme have until 5pm on 31 October to elect to do so.
  • ArcelorMittal (JSE: ACL) has renewed its cautionary announcement without providing any further details on what is happening in the Longs business.
  • Enthusiasts of the bond market will want to keep an eye on NEPI Rockcastle (JSE: NRP) and their planed issuance of €500 million in green bonds. They will use this to finance or refinance eligible “green” projects. The group has also launched a tender offer to repurchase bonds due in 2026 and 2027. For a group of this size and with such important debt, the liability side of the balance sheet is very actively managed.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

UNLOCK THE STOCK: CA Sales Holdings

The Finance Ghost
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UNLOCK THE STOCK: CA Sales Holdings

Unlock the Stock is a platform designed to let retail investors experience life as a sell-side analyst. Corporate management teams give a presentation and then we open the floor to an interactive Q&A session, facilitated by the hosts.

We are grateful to the South African team from Lumi Global, who look after the webinar technology for us, as well as EasyEquities who have partnered with us to take these insights to a wider base of shareholders.

In the 61st edition of Unlock the Stock, CA Sales Holdings returned to the platform to talk about the recent numbers and the strategic outlook for the business. With Mark Tobin of Coffee Microcaps travelling abroad, I hosted this event with the team from Keyter Rech Investor Solutions.

Watch the recording here:

Ghost Bites (Investec | Mustek | Safari Investments)

The Finance Ghost
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Ghost Bites (Investec | Mustek | Safari Investments)

Flat earnings at Investec (JSE: INP | JSE: INL)

Some years you hit 6s and 4s, others are about getting the singles and consolidating

Investec released a pre-close update dealing with the six months to September. There isn’t much here for shareholders to feel excited about, with HEPS expected to be move by between -4% and +4%. That’s a flat move at the midpoint of guidance.

Pre-provision operating profit is likely to be in the red, with an expected range of -6% to 0% vs. the prior year. Strong credit quality and the cost-to-income ratio being in line with guidance helped improve the HEPS result vs. pre-provision operating profit.

In the South African business, Investec expects adjusted operating profit to be ahead by up to 7% year-on-year, so the core local banking operations are still achieving growth. The impact of lower income from group investments will drag adjusted operating profit down to a move of between -5% and 0%. The credit loss ratio is thankfully at the lower end of their through-the-cycle range and so they expect to achieve return on equity of 18.5%, comfortably within the 16% to 20% medium-term target.

In the UK, which includes Rathbones, adjusted operating profit will be a move of between -1% and +6%. The credit loss ratio is expected to be at the upper end of the guided range. Return on tangible equity will be around 13%, at the bottom of the medium-term target of 13% to 17%.

Overall, group return on equity metrics are within target ranges. Things definitely need to improve in the UK in particular though.

An interesting insight is that there’s a year-on-year dip in investment and trading income in South Africa, showing how the shine has come off the local story in the wake of the initial GNU excitement. On the plus side, funds under management in the Southern African Wealth business were up 7.8%, including positive net inflows.

Finally, if you read all the way down the announcement, you’ll find a note that Investec believes that the current provision of £30 million for the UK motor industry commissions nightmare is sufficient. You would’ve seen this issue playing out at a much bigger scale for sector peer FirstRand (JSE: FSR) and their significant exposure to vehicle finance in the UK.

Investec’s share price is flat over 12 months, which is a fair reflection of the underlying earnings.

Mustek is struggling for revenue (JSE: MST)

And the COVID-era margins are gone

Mustek has had a difficult time in the aftermath of the pandemic. CEO and founder David Kan passed away in 2022, thrusting the group into a new era at a time when the world was just emerging from COVID, an historic event that had a significant impact on the IT industry. To add to the volatility in the journey, we’ve also seen the disappearance of load shedding, which meant a negative impact on Mustek’s energy products.

You can see the broader environment come through clearly in the investor presentation for the year to June 2025, including in this chart of revenue:

The EBITDA chart is even more striking, showing that margins have now gone below pre-COVID levels as the company generated EBITDA in line with the June 2020 and June 2019 years:

Once you factor in the higher net interest costs thanks to where we are in the interest rate cycle, you get to HEPS of just 73 cents for FY25, approximately a fifth of where they were in the pandemic. HEPS is up by 9% year-on-year though, despite revenue being down 15%, so perhaps the worst is behind them.

The highlight here is clearly the cash generated from operations, with Mustek achieving a significant reduction in inventory and receivables. This chart is best viewed in the context of the charts above, showing just how much cash has been released:

The thing is, working capital is called that for a reason: this is cash put to work in the business. As Mustek’s revenue has gotten smaller in the past couple of years and the business has therefore shrunk, it should’ve released cash. The question now is whether the management team can do something with it to achieve a return to growth.

This will be the true test of the new management team as they take Mustek into the future. Perhaps their cute robotic protea flower mascot is a sign of things to come in an SA-focused tech strategy.

Safari Investments enjoyed another strong year (JSE: SAR)

They’ve flagged a desire to raise capital

Safari Investments has an unusual property portfolio. For a start, there’s no Western Cape exposure at all. 92% of the portfolio’s GLA is in Gauteng and the other 8% is in Limpopo. The portfolio is almost exclusively retail, with a tiny medical component that comprises just 0.9% of GLA.

As you’ve perhaps guessed by now, Safari’s strategy is focused on retail properties where the anchor tenants would typically be the grocery players like Shoprite and Boxer rather than Woolworths. These lower-income malls offer decent growth prospects in South Africa as they capture the shift from informal to formal retail spending.

Here’s a comment made by the Safari Investments chairperson that tells a candid story about the local grocery sector: “Again, we see the Shoprite brand running away with the gold medal and being the choice retailer in our food segment of the market.”

Simple as that – and something for Shoprite (JSE: SHP) shareholders to note (along with investors in competitors).

Another refreshingly straightforward comment made by the chairperson involves the company’s desire to return to shopping centre development, which means they will need capital. They couldn’t make it more obvious that capital raising activities are coming down the line, which probably means accelerated bookbuilds if the typical sector behaviour is anything to go by. This is another sign that things have improved significantly in the property sector in the JSE, with more companies looking at ways to tap the market for growth capital.

The good news is that they are doing this from a position of strength, with a distribution per share this year of 74 cents vs. 62 cents in the prior period on an adjusted basis (FY24 was a 15-month period as they changed their financial year-end).

One of the key metrics powering these numbers is the reversion ratio, with positive reversions of 10.8% for this period after enjoying positive reversions of 8.3% in the prior period. There aren’t many local funds that are putting out numbers like that. In case you aren’t familiar with the term, positive reversions mean that new leases are being executed at higher rates than the old leases – in other words, income for landlords is going up.

The loan-to-value ratio is 31.5%, an improvement from 33% in the prior year and a strong base off which to raise capital. They just need to be careful not to dilute the investment case, as one of the buildings they are considering is an upmarket mixed-use centre in Lynnwood that would include their new head office. That sounds like a Woolworths mall, not a Shoprite mall.

Nibbles:

  • Director dealings:
    • Woolworths (JSE: WHL) announced that the group company secretary and the company secretary of a major subsidiary sold shares worth a total of R3.4 million. The announcement isn’t explicit on whether this is only the taxable portion of awards, so I assume that it isn’t.
    • A non-executive director of Deneb Investments (JSE: DNB) sold shares worth R3 million.
    • Des de Beer has bought shares in Lighthouse Properties (JSE: LTE) worth R2.2 million.
    • The company secretary of Hammerson (JSE: HMN) sold shares worth almost R2 million.
    • The current CFO and soon to be CEO of KAP (JSE: KAP) bought shares worth R582k.
  • Not a director dealing in the traditional sense, but interesting nonetheless that Bowler Metcalf (JSE: BCF) issued R1 million in treasury shares to a director in settlement of a once-off bonus.
  • I don’t usually comment on general director changes, but given all the difficulties at Conduit Capital (JSE: CND), I thought it was worth mentioning that an independent non-executive director and executive director have resigned.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

The unbeatable Bertha Benz

Dominique Olivier
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The unbeatable Bertha Benz

Long before racing circuits, luxury sedans, and million-dollar dealerships, there was one woman who quietly steered the Mercedes-Benz brand into the world’s imagination. Her name was Bertha Benz, and she was the first person to attempt a long-distance drive in a motorcar.

Bertha Ringer was born on 3 May 1849 in Pforzheim, in what was then the Grand Duchy of Baden. She was the third of nine children in a wealthy household. Her father, Karl Friedrich Ringer, made his fortune through carpentry and real estate speculation, while her much younger mother, Auguste, managed their bustling home.

As such, Bertha grew up surrounded by comfort and opportunity. She attended boarding school for a decade (an unusual privilege for girls at the time), where she developed a sharp mind and a keen curiosity about science and technology. Yet, like so many ambitious women of her time, her path was limited by law and custom. Universities were barred to her, and engineering was a closed door.

Still, Bertha was determined to be more than a housewife or a pretty society ornament. And while that determination was frowned upon at the time, it would later prove to be historic.

Enter Carl Benz

On a summer excursion in 1869, Bertha’s brother introduced her to a man named Carl Benz (his preferred spelling of Karl). He was five years older than her, penniless, and obsessed with machines. Bertha fell in love immediately. While Carl wasn’t smooth with words of love, he could talk endlessly about engines and mechanics. Where others saw a dreamer on the verge of failure, Bertha saw a man that she wanted to build things with.

In 1870, before they were married, Bertha invested part of her dowry into Carl’s struggling iron construction company. At that time, German law allowed an unmarried woman to make such decisions, but once married, she would lose that right. The investment kept Carl afloat and gave him room to pivot toward his true passion, which was building a “horseless carriage”.

When the two married in July 1872, they became more than husband and wife. They became co-inventors and business partners.

A dream in motion

The Benz’s early years were anything but easy. As their family grew, the couple lived under constant financial strain. In 1875, when Bertha was pregnant with their third child, debt collectors emptied their workshop overnight. Yet they persevered, and on New Year’s Eve in 1879, the breakthrough came when Carl and Bertha managed to get a two-stroke engine running. After years of tinkering, trial and humiliation, they were finally closer to realising Carl’s dream.

By December 1885, the first Patent-Motorwagen was complete – a three-wheeled contraption with a single-cylinder engine, spoked wheels, and a folding top. Carl secured a patent the following year for what would later be recognised as the world’s first automobile.

But there was a problem: nobody cared.

Carl Benz was an inventor, not a salesman, and his car looked fragile, noisy, and impractical. Wealthy Germans preferred their elegant carriages, pulled by reliable horses. Meanwhile, Gottlieb Daimler was emerging as a competitor with his own designs.

Carl was discouraged. Bertha, however, was not.

The forbidden journey

On 5 August 1888, 39-year-old Bertha quietly rolled the Model III Patent-Motorwagen out of their workshop in Mannheim. She set off at dawn without telling her husband, with only her two teenage sons, Richard and Eugen, to accompany her. Their destination was her mother’s home in Pforzheim, 106 kilometres away.

Officially, she was visiting family. Unofficially, she was staging the greatest marketing stunt of the century.

Up until that point, motorcars had only been tested in short loops, always close to workshops and with mechanics on hand. Bertha’s audacious idea was to prove the Motorwagen could handle a real journey through towns, over hills and across the countryside, and that it could be operated by anyone – even a woman (a big deal in those days).

Of course, the going wouldn’t be easy, but fortunately Bertha was a top class problem solver. Instead of a fuel tank, the Motorwagen had only a tiny carburettor with a 4.5-litre capacity. When it ran dry, Bertha stopped at a pharmacy in Wiesloch to purchase ligroin, a petroleum solvent. The apothecary that sold it to her unwittingly became the world’s first petrol station. When a fuel line clogged, Bertha unclogged it with her hat pin. When wiring needed insulation, she used her garter. A small-town blacksmith was enlisted to mend a broken chain, and when the wooden brakes wore thin, she persuaded a cobbler to nail on strips of leather, thereby creating the world’s first brake linings.

The car’s two gears weren’t enough for steep inclines. On hills, her sons had to get out and push. The engine’s cooling system demanded constant refills, so they collected water at every stop.

On top of all of that, the roads themselves were hostile. Designed for four-wheeled wagons, they rattled the Motorwagen’s narrow front wheel over stones and tufts of grass. With no road signs in place, Bertha navigated by memory and instinct. The trip was technically illegal, since she had no permit to test the vehicle, and incredibly dangerous.

And yet, after a full day’s journey, Bertha and her sons arrived safely in Pforzheim at dusk. She promptly sent her husband a telegram announcing their safe arrival. Days later, they drove the Motorwagen back to Mannheim, triumphant.

A turning point

The impact was immediate. Newspapers both local and international picked up the story, and crowds gathered wherever the Motorwagen appeared. Suddenly, people could imagine what this noisy, smelly machine might mean: a carriage that didn’t need horses, a vehicle that could carry families across distances, a new era of mobility.

Bertha’s field test also revealed a host of practical improvements. She had made detailed notes during her journey, and assessed that more gears, better brakes and more durable materials were required. Carl took Bertha’s suggestions seriously, and the car evolved. Most importantly, sales began.

Within a few years, Benz & Cie. was the world’s largest automobile company. By 1926, it merged with Daimler and Maybach to form Daimler-Benz, home of Mercedes-Benz. The global automotive industry owes much of its existence to Bertha and her daring drive.

Recognition at last

Carl Benz lived long enough to see the success of his invention. He died in 1929, during the Great Depression, just two years after the Daimler-Benz merger. In his memoirs, he credited his wife with saving not just his company, but his spirit:

“Only one person remained with me in the small ship of life when it seemed destined to sink. That was my wife. Bravely and resolutely she set the new sails of hope.”

Bertha herself lived to the ripe age of 95. On her birthday in 1944, she was named an Honorary Senator of the Technical University of Karlsruhe – the same university that had barred her from study as a young woman. She died just two days later, in her home in Ladenburg.

It took decades for the world to fully acknowledge her role. Carl was inducted into the Automotive Hall of Fame in 1974. Bertha followed only in 2016, 42 years later. But history has caught up. Today, the Bertha Benz Memorial Route traces her historic journey through Baden-Württemberg, celebrated by motorists retracing the path where the first long-distance drive once rattled over cobblestones.

Carl Benz may have built the car, but Bertha Benz put it on the map.

On that August morning in 1888, she did more than visit her mother. She proved that the automobile had a future. She marketed it, tested it and improved it, all in one audacious journey.

In honour of International Women’s Day in 2019, the Daimler company commissioned a truly excellent four-minute film dramatising portions of Bertha Benz’ 1888 journey. You can see it here:

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.

Ghost Bites (Bytes Technology | Finbond | Lighthouse Properties | SA Corporate Real Estate)

The Finance Ghost
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Ghost Bites (Bytes Technology | Finbond | Lighthouse Properties | SA Corporate Real Estate)

The Bytes share price chart is an incredible way to be slightly down year-to-date (JSE: BYI)

Talk about a rollercoaster ride!

If someone told you that they were down 2.8% year-to-date in a stock, you probably wouldn’t expect to see something quite like this:

Those who managed to get in at the bottom have done nicely, although there was a scary dead cat bounce just after the precipitous drop. Trading is fun, but hard.

Underneath all this, we have Bytes Technology as an example of a broken growth stock. It’s not really a broken company of course, but it’s certainly broken in terms of the growth expectations that the market used to have.

They are dealing with structural changes to their business that have led to words like “resilience” when describing the performance in the latest half-year trading update – not the kind of language that growth investors want to see.

The update notes that gross invoiced income for the six months is expected to be around £1.33 billion, which is ahead of £1.23 billion in the comparable period (not that the announcement bothers to give comparatives – you have to go digging). The problem is that despite this growth, gross profit is expected to be “not less than £82 million” (i.e. not less than what they managed last year) and operating profit is expected to be not less than £33 million. The prior year was £35.6 million, so there’s chance of a small dip in profits.

When a company needs to rebuild trust with the market, an announcement that just gives numbers without comparatives or a reminder of the guidance at the AGM isn’t good enough. Given the previous management scandal at Bytes and now the lack of growth under new management, they should be falling over themselves to make things easy for investors to understand, even when it’s a tough message to deliver.

Finbond swings into profits (JSE: FGL)

Yay for an early trading statement!

Finbond has released a trading statement for the period ended August 2025. Results are due to be released on 31 October, so they’ve done the right thing here and released a trading statement that gives investors plenty of advance warning.

It’s easier of course when you know that there’s a huge move in HEPS, but that’s exactly the point with a trading statement – the bigger the move, the earlier the trading statement should come out.

In this case, HEPS has increased by more than 100%, swinging from a loss of 2 cents per share to positive earnings of at least 0.5 cents per share.

Lighthouse adds the hypermarket at Espacio Mediterraneo to the deal (JSE: LTE)

Initially, it looked like the current, separate owner would be keeping it

Back in June this year, Lighthouse Properties announced the acquisition of Espacio Mediterraneo in Spain, adding to the portfolio in the Iberian Peninsula. The property has a large hypermarket in it (currently occupied by Carrefour) that was excluded from the deal due to its separate ownership.

Lighthouse has managed to persuade the owner to part with the hypermarket for €19.5 million, which is a net initial yield of 7% (excluding transaction costs). I can understand why owning the entire mall is much easier from a management perspective than having a separate owner of the hypermarket unit.

Despite the name, SA Corporate Real Estate holds various property types – even residential (JSE: SAC)

And the interim results tell a positive story

The property sector seems to be a pretty consistent source of growth at the moment. Most companies are growing their distribution at a rate above inflation, while some have achieved outstanding growth at much higher levels. The sector would’ve loved to see an interest rate cut this week, but alas it seems as though the SARB loves watching South Africans live life on hard mode.

In the meantime, the property sector (like all South Africans) must keep grinding away. SA Corporate Real Estate has a diverse property portfolio that managed like-for-like net property income growth of 4.9% in the six months to June 2025, along with a 7.5% increase in the distribution per share. This increase was partially due to the payout ratio being 92.5% vs. 90.0% in the comparable period, so just be aware of that – there’s only so far that a payout ratio can be pushed.

The loan-to-value ratio improved from 42.0% as at December 2024 to 40.3% by June, assisted by a significant asset disposal programme. Combined with a decrease in the weighted average cost of funding, this boosted earnings.

Perhaps the most unusual thing about SA Corporate Real Estate is the residential portfolio. Along with the types of properties that you’re used to seeing in listed funds, the company has what can only be described as buy-to-let at scale – and my head hurts just thinking about it, particularly as these are inner city properties in places like Joburg. While enjoying the rental income in the meantime, they are looking to sell over 3,000 units over the next three years. The sales thus far have been 60% above cost and 20% above book value, so they will hope for this trend to continue.

Here’s an interesting nugget from the results: “The redevelopment of Montana Crossing is now complete, with the introduction of Checkers Fresh X, Checkers Liquor and Petshop Science as anchor tenants replacing Pick n Pay. The Group anticipates a 30% uplift in the rental income of Montana Crossing for the 2026 financial year as a result.”

If you look at the property funds, you learn so much about retail. Whilst Pick n Pay (JSE: PIK) may shrink into a sustainable business, my view is that they will never regain the lost ground. Shoprite (JSE: SHP) is just sailing off into the sunset from a market share perspective.

Finishing off with SA Corporate Real Estate, the fund expects distributable income per share growth for the full year of between 4% and 5%. Thanks to the higher payout ratio, the distribution per share is expected to be between 7% and 8% higher.

Nibbles:

  • Director dealings:
    • Des de Beer bought more shares in Lighthouse Properties (JSE: LTE), this time to the value of R5.4 million.
    • The chairman of Sibanye-Stillwater (JSE: SSW) bought shares worth R174k and an executive director bought shares worth R1.9 million.
    • The chairman of KAP (JSE: KAP) bought shares in the company worth R50k.
  • Keen to learn more about Datatec (JSE: DTC)? The management team presented at the RMB Morgan Stanley Off Piste Conference this week and the company has made the presentation available here.
  • Here’s something worth keeping an eye on: Tiger Brands (JSE: TBS) has repurchased around 3% of its shares since the AGM in February 2025. That’s an investment of R1.5 billion in the company’s own shares at an average price per share of R278.61 (current price is R315.77). They can repurchase up to a total of 10% of the shares that were in issue at the date of the AGM. The benefit of repurchasing shares is that it boosts HEPS, as the pie is effectively being cut into fewer pieces to feed the remaining shareholders, hence each shareholder gets a bigger slice!
  • Remember Wikus Lategan from Calgro M3 (JSE: CGR)? Having resigned as CEO of Calgro M3 a while ago to pursue other opportunities, he’s now popped up as an independent non-executive director of Safari Investments (JSE: SAR). The announcement notes that Lategan is the co-founder of ION Holdings, a property investment firm. It will be interesting to see what he gets up to! Safari announced that corporate and commercial attorney Conrad Dormehl has also joined the board as an independent non-executive director, so the board has certainly been beefed up.
  • Vunani Limited (JSE: VUN) has released a bland cautionary, which means a cautionary announcement that is low on details (flavour). All we know is that a wholly owned subsidiary has entered into negotiations of some kind. We have no idea whether this is for an acquisition or disposal.
  • Shuka Minerals (JSE: SKA) has updated the market on a further delay to the funds due to be received from Gathoni Muchai Investments to facilitate the acquisition of Leopard Exploration and Mining Limited and the Kabwe Zinc Mine. It’s never good when weird things like payment delays start happening, particularly when they aren’t rectified timeously. The funder expects to resolve this problem by the end of September. Thankfully, the sellers of the assets remain supportive of the transaction.
  • Assura (JSE: AHR) has confirmed that the delisting of its shares from the JSE is expected to take place on 3 October, followed by the delisting in London on 6 October. This is because of the successful offer by Primary Health Properties (JSE: PHP) that achieved sufficient acceptances to allow the company to follow a squeeze-out process to mop up the remaining shares.
  • MTN Zakhele Futhi (JSE: MTNZF) released results for the six months to June 2025. They don’t really matter though, as the company is in the final stages of being wound up and the June NAV is now a very outdated number based on the distributions to shareholders. I’m purely mentioning it for completeness.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

Who’s doing what this week in the South African M&A space?

Marylou Greig
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Who’s doing what this week in the South African M&A space?

Exchange-Listed Companies

In March, Metrofile released a cautionary advising that it was in discussions relating to the potential acquisition of the Company. This week the parties released a joint firm intention announcement in respect of Main Street 2093’s offer to acquire Metrofile (excluding the treasury shares) for a cash consideration of R3.25 per offer share for an aggregate R1,37 billion. Shareholders accounting for 52.81% of eligible shares have committed to supporting the deal. The Long Stop Date has been set at 15 April 2026.

Anglo American, through its 50.1%-owned subsidiary, Anglo American Sur S. A. (AAS), has entered into a joint mine plan with Codelco for their adjacent copper operations. The agreement is expected to unlock at least US$5 billion of value from Los Bronces and Andina copper mines in Chile. The joint mine plan has been developed to unlock an additional 2.7 million tonnes of copper production over a 21-year period once relevant permits are in place, currently expected in 2030. The 120,000 tonnes per year will be shared equally, with c.15% lower unit costs relative to the standalone operations and with minimal incremental capital expenditure. The transaction is expected to generate a pre-tax net present value uplift of at least $5 billion, to be shared equally between AAS and Codelco. Both parties will maintain the flexibility to develop separate standalone projects, including the advancement of underground resources, during the term of the joint mine plan.

In June 2025 Espacio Mediterràneo, a shopping mall in Cartagena in the province of Murcia, was acquired by Lighthouse Properties for €135,4 million, reinforcing its strategic positioning in Spain. At the time the hypermarket unit was under separate ownership and excluded from the transaction. Lighthouse has now entered into an agreement with Frey Mediterraneo to acquire the Hypermarket for €15,5 million reflecting a net initial yield of 7%.

As part of its ongoing strategic repositioning and restructuring programme Accelerate Property Fund has disposed of the commercial property 73 Hertzog Boulevard, situated in The Foreshore, Cape Town. The property has been sold to Amrichprop 2 Properties for an aggregate R68 million. The transaction is classified as a Category 2 transaction for Accelerate and as such does not require shareholder approval.

In a detailed cautionary announcement Ascendis Health notified shareholders that it had initiated a process regarding a potential delisting of the company from the JSE. Shareholders wishing to dispose of Ascendis shares will receive R0.97 per share in a conditional offer – to be accepted by shareholders holding not more than 20% of the shares in issue. In November 2023, CAN Capital IHC-led consortium offered shareholders R0.80 per share to take the Ascendis private but the transaction lapsed following an investigation by the TRP initiated due to complaints received.

OUTsurance has reached binding terms to dispose of 83% of the Group’s 14.4% interest in Entersekt. The transaction is expected to close by December 2025. The information was released in its AFS.

Visual International has received a non-binding offer from private investment and development company Serowe Industries for the acquisition of a minority stake of up to 34.9% in the company. The potential subscription of a minority stake is for an indicative subscription consideration of R60 million. The non-binding offer incorporates a request for exclusivity, of which 40 days has been granted. Visual will however issue shares for cash for R2 million by way of a bookbuild – details of which will be released separately and in which Serowe may participate.

Libstar has received non-binding expressions of interest from parties regarding the potential acquisition of all Libstar shares in issue. This follows the company’s announcement in March that the Board would assess potential strategies through which to deliver meaningful value unlock for stakeholders, alongside continued execution of Libstar’s ongoing operational and strategic initiatives.

In early September Shuka Minerals informed shareholders that the finalising of the acquisition of Leopard Exploration and Mining (LEM) and the Kabwe Zinc announced in July 2025, had been hindered due to the delay in the remittance of funds in the form of a loan from Gathoni Muchai Investments (GMI). The loan is necessary to satisfy the US$1,35 million balance of cash consideration due to the LEM vendors. GMI has confirmed that the matters are expected to be resolved by the end of September 2025 and have further confirmed their financial capacity to meet these obligations.

While the key scheme conditions for the acquisition by ASP Isotopes of Renergen have been fulfilled and the parties are optimistic that the remaining conditions can be met by 30 September as per the Circular, the decision has been taken to extend the fulfilment date to 28 November 2025.

In October 2024, Nampak announced that it would sell its 51.43% shareholding in Nampak Zimbabwe to TLS for a maximum consideration of US$25 million. This week shareholders were advised that the circumstances for TSL in motivating the transaction to their shareholders had changed and had, as a result with the agreement of Nampak, withdrawn from the proposed transaction. The plan to dispose of the stake in the Zimbabwean operation remained in place.

Unlisted Companies

African global telematics and fleet asset management business Ctrack has received a R406 million investment from Sanari Capital, through its 3S Growth Fund, (R250 million) and 27four Investment Managers (R156 million). The investment builds on Ctrack’s strategic acquisition of Inseego’s international telematics business in 2024.The transaction, which was supported with a follow-on investment by Convergence Partners, consolidated Ctrack’s global footprint and expanded its presence in key international markets. The new investment will further accelerate this global expansion and support innovation on Ctrack’s unified technology platform.

DealMakers is SA’s quarterly M&A publication.
www.dealmakerssouthafrica.com

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
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Weekly corporate finance activity by SA exchange-listed companies

In a move to further increase its exposure to SA Corporate Real Estate (SAC), Castleview Property Fund acquired 125,252,618 SAC shares at an average purchase price of R2.80 per share for an aggregate consideration of R350,71 million. Following the conclusion of the latest transaction, Castleview holds a 21.13% stake in SAC.

OUTsurance is to pay a special dividend of 33.1 cents per ordinary share payable on October 20, 2025.

Fortress Real Estate Investments is offering shareholders the opportunity to elect to receive a dividend in specie of ordinary shares in NEPI Rockcastle (NRP) in respect of all or some of their Fortress B shares in lieu of the cash dividend. Fortress currently holds 108,292,699 NRP shares constituting 15.2% of the total issued shares capital of NRP. Publication of the results of the dividend in specie will be announced on 21 October 2025.

Naspers has finalised the dates in respect of the amendments to its existing share capital structure through the pro rata subdivision of the N ordinary shares and A ordinary shares. The subdivision will be effected in the ratio of five-for-one for reach respective class of issued shares. After the split there will be 7,5 million authorised A shares and 1,5 billion Ordinary shares. Naspers will suspend its repurchase programme temporarily from 25 September to 2 October 2025 with the subdivision effective and implemented on 6 October 2025.

Altvest Capital’s name change to Africa Bitcoin Corporation has been registered by CIPC and will trade under the new name from 23 September 2025.

Assura shares will be suspended on the JSE from 3 October 2025 and the company’s listing on the LSE and JSE will terminate on 3 and 23 October 2025 respectively.

The JSE has advised shareholders that Labat Africa has failed to submit its condensed financial statements withing the three-month period stipulated in the JSE’s Listing Requirements and risks the threat of suspension if these are not submitted on or before 30 September 2025.

This week the following companies announced the repurchase of shares:

Over the periods 12 March to 9 May and 23 July to 16 September 2025, Tiger Brands repurchased 5,420,969 shares representing a 3% stake in the issued share capital of the company. The shares were repurchased at an average price of R278.61 per share for an aggregate R1,51 billion, funded from available cash resources. The shares will be delisted and cancelled. The company may repurchase a further 6.994% (12,6 million shares) of its shares under the general authority granted at its AGM.

South32 continued with its US$200 million repurchase programme announced in August 2024. The shares will be repurchased over the period 12 September 2025 to 11 September 2026. This week 794,183 shares were repurchased for an aggregate cost of A$2,09 million.

Momentum repurchased a total of 44 million shares at an average price of R31.43 per share during the financial year to end June 2025 for an aggregate cost of R1,4 billion. 42 million shares were cancelled prior to year-end. The Board has approved a further R1 billion for the buyback programme subject to Prudential Authority approval.

Investec ltd commenced its share purchase and buy-back programme of up to R2,5 billion (£100 million). On 10 September 2025, Investec ltd purchased on the LSE, 163,676 Investec plc ordinary share at an average price of £5.8099 per share and 108,844 Investec plc shares on the JSE at an average price of R137.3015 per share. Over the same period Investec ltd repurchased 31,207 of its shares at an average price per share of R136.7294. The Investec ltd shares will be cancelled, and the Investec plc shares will be treated as if they were treasury shares in the consolidated annual financial statements of the Investec Group.

The purpose of Bytes Technology’s share repurchase programme, of up to a maximum aggregate consideration of £25 million, is to reduce Bytes’ share capital. This week 600,000 shares were repurchased at an average price per share of £4.11 for an aggregate £2,47 million.

Glencore plc’s current share buy-back programme plans to acquire shares of an aggregate value of up to US$1 billion. The shares will be repurchased on the LSE, BATS, Chi-X and Aquis exchanges and is expected to be completed in February 2026. This week 9,3 million shares were repurchased at an average price of £2.99 per share for an aggregate £27,77 million.

In May 2025 Tharisa plc announced it would undertake a repurchase programme of up to US$5 million. Shares have been trading at a significant discount, having been negatively impacted by the global commodity pricing environment, geo-political events and market volatility. Over the period 8 to 12 September 2025, the company repurchased 20,195 shares at an average price of R21.85 on the JSE and 242,308 shares at 92.51 pence per share on the LSE.

In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is being funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 483,542 shares at an average price of £41.25 per share for an aggregate £19,94 million.

During the period 8 to 12 September 2025, Prosus repurchased a further 1,217,622 Prosus shares for an aggregate €65,6 million and Naspers, a further 98,011 Naspers shares for a total consideration of R570,23 million.

Two companies issued profit warnings this week: Oceana and Choppies Enterprises.

During the week four companies issued or withdrew a cautionary notice: Ascendis Health, Libstar, Metrofile and Vunani.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Who’s doing what in the African M&A and debt financing space?

Vanessa Aitken
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0
Who’s doing what in the African M&A and debt financing space?

DealMakers AFRICA

Nasan Energies Namibia has agreed with Vivo Energy Namibia to acquire 53 Engen and Shell-branded fuel service stations. In May 2024, Vivo Energy completed the purchase of Engen Limited from Petronas, which included the Engen Namibia business. However, as part of the regulatory process, the Nambian Competition Commission determined that Vivo Energy would have to sell a number of its service stations to uphold a fair and dynamic market. Following a thorough evaluation process that assessed both technical expertise and financial proposals, Nasan Energies was selected as the preferred bidder. The value of the deal was not disclosed and is subject to approval by the Namibian Competition Commission.

The Norwegian government’s investment fund for business development in developing countries Norfund, has announced an undisclosed debt investment in Mohinani Group to support the expansion of its rPET (recycled polyethylene terephthalate) initiatives in Ghana and Nigeria. The investment in the form of a loan aims to reduce waste, cut greenhouse gas emissions, and create jobs in two of West Africa’s largest economies. The Mohinani rPET facilities in Ghana and Nigeria, managed by Polytanks Ghana Limited and Sonnex Packaging Nigeria Limited, respectively, have the capacity to produce 15,000 tons of recycled PET resins each annually.

Metier, through its Capital Growth Fund III, has invested with Watu Group, a non-deposit taking microfinance institution focused on financing income-generating assets for underserved communities across sub-Saharan Africa. Founded in 2015, Watu has a strong presence in Kenya, Uganda, and Tanzania, and expanding operations in Rwanda, Sierra Leone, the Democratic Republic of Congo, Nigeria, and South Africa. Watu’s mission is to meaningfully improve employment and economic opportunity for individuals facing the greatest barriers to accessing financial services. Watu provides financing for income-generating assets, supporting access to mobility (2/3-wheeler ICE and electric vehicles) and connectivity (smartphones) assets for underserved and underbanked communities. The company employs over 2,800 people with more than 1.4 million active clients.

Amethis Fund III announced the acquisition of a minority stake in BH Holding, a Moroccan player in the packing and export of high-value fruits. BH Holding is a structured family-owned group with a key position in the sector, thanks to its full integration across the value chain – from production to export – and its distribution under both premium proprietary brands and private labels. The group primarily exports citrus fruits, cherry tomatoes, and red fruits to North America and Europe. It relies on modern agricultural practices and demonstrates a strong commitment to sustainability and technological innovation. Financial terms were not disclosed.

Adiwale Fund I acquired a minority stake in Codex SA, a Senegalese lifting services provider, for an undisclosed sum. Codex SA operates the largest fleet of mobile cranes in Senegal, with over 120 equipment, including cranes, forklifts, aerial platforms, and semi-trailers, and a 11,000 m² operational base located 35 km from Dakar. The company serves a diverse client base, particularly in the energy (oil & gas, wind, solar), industrial (refineries, chemical plants, etc.), and mining sectors. The capital will support the acquisition of new equipment to meet rising market demand and the mobilisation of resources to implement the company’s regional expansion programme.

In Egypt, Duaya, a digital transformation company in the healthcare sector, has acquired EXMGO, a provider of SaaS solutions for pharmacies and medical businesses, in a six-figure investment deal (value undisclosed). Founded in 2021, Duaya offers a platform that connects suppliers with pharmacies, clinics, hospitals, and labs. Following the deal, EXMGO was rebranded as Duaya Go, offering branded apps and websites for pharmacies to manage online sales, inventory, and payments.

Premier Credit Uganda, a subsidiary of The Platcorp Group, has secured a US$1,5 million investment from Enabling Qapital, a Swiss-based impact asset manager. The investment will enable Premier Credit Uganda to scale operations, innovate its services, and extend access to finance to underserved communities across Uganda.

DealMakers AFRICA is the continent’s quarterly M&A publication
www.dealmakersafrica.com

Mergers and acquisitions in the food industry

Gopolang Kgaile and Zinhle Gebashe
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Mergers and acquisitions in the food industry

LEGAL TRENDS AND CONSIDERATIONS

The global food industry has experienced significant transformation in recent years, driven by evolving consumer preferences, technological advancements and economic factors. Mergers and acquisitions (M&A) have become pivotal strategies for companies seeking to enhance their market position, diversify product offerings and achieve economies of scale.

According to data from S&P Global, 50 transactions were announced in the food and beverage industry in the first quarter of 2025. This marks a 34% quarter-on-quarter decline in transaction volume, making it the lowest quarterly deal count since the second quarter of 2015.

Higher levels of activity appear to have continued into the second quarter of 2025, with notable transactions including Unilever’s £230m acquisition of Wild, Müller’s £100m takeover of Biotiful, and the merger of Greencore and Bakkavor. Despite this activity, Grant Thornton’s Head of Consumer Industries, Nicola Sartori notes that mounting economic uncertainty may impact dealmaking in the second half of the year due to increased global market volatility.

In developed markets, M&A trends in the food sector are being driven by a strong focus on health and wellness, cost efficiency and technology adoption. Consumers are placing more value on organic, sustainable and healthier food options, prompting companies to pursue acquisitions that align with these preferences. At the same time, rising inflation and supply chain disruptions are placing pressure on margins, encouraging companies to consolidate operations to reduce costs and improve profitability. Technology is also playing a growing role, with traditional food companies acquiring tech-savvy start-ups to enhance production processes, streamline supply chains and expand their online presence.

In African markets, M&A activity in the food sector is accelerating due to a different set of growth drivers. Population growth means an increasing demand for food products, while rapid urbanisation is changing consumer habits and driving interest in processed foods, prompting traditional companies to modernise and scale up through strategic mergers and acquisitions. In addition, Africa’s emerging markets present attractive opportunities for international investors seeking to enter or expand within the continent’s food sector.

Legal trends

The legal landscape surrounding M&A in the food industry is complex and varies across regions. However, several common trends have emerged and are reshaping the food industry’s legal landscape. One of the most significant is increased regulatory scrutiny. Competition authorities are taking a more active role in reviewing M&A transactions to prevent the creation of monopolies and to ensure fair competition. In the United States of America (USA), for example, the Federal Trade Commission (FTC) and the Department of Justice review M&A activity under antitrust laws. In South Africa, the Competition Commission plays a similar role. These regulatory authorities can block or require modifications to proposed mergers that threaten consumer choice or market integrity. For instance, the FTC recently blocked a proposed US$25bn merger between Kroger and Albertsons due to concerns over reduced competition and potential price hikes. Cross-border M&A deals face additional regulatory hurdles as authorities and enforcement agencies assess compliance with global standards, which can delay or derail deals.

Environmental, social and governance (ESG) considerations are also becoming more prominent in M&A decision-making. Although individual ESG elements have long featured in due diligence processes, there is growing pressure on acquirers to demonstrate broader alignment with sustainability and social responsibility goals. Acquiring a company with strong ESG credentials can enhance brand reputation and appeal to socially conscious consumers and investors.

Due diligence remains a central component of any M&A transaction. Legal due diligence typically involves reviewing contracts, employment and labour matters, intellectual property and regulatory compliance (including licences and land rights). This legal review is conducted in tandem with financial, tax and operational due diligence to identify potential risks that could influence negotiation strategies, risk allocation and purchase price adjustments. The insights gained during due diligence are key to shaping negotiation strategies, allocating risk, adjusting the purchase price (where necessary) and, ultimately, ensuring that the transaction delivers long-term value.

Key considerations

When assessing M&A opportunities in the food industry, businesses must take several factors into account. It is essential to assess whether the target company aligns with your strategic objectives, whether that means expanding your product line, gaining access to new markets, or acquiring technological capabilities. A comprehensive financial analysis will help determine the target’s profitability, debt levels and potential for sustainable growth. Planning for integration is equally important. Companies need a detailed approach to merging operations, harmonising supply chains, managing culture, and aligning systems across the combined business. Risk management should also be prioritised, with clear strategies in place to address potential risks, such as regulatory barriers, market volatility and operational disruptions.

While M&A activity in the food industry offers significant opportunities for growth and diversification, these transactions are not without legal and operational complexity. Success depends on a clear understanding of evolving market trends, strong legal and regulatory awareness, and thorough preparation throughout the deal process. By staying informed and taking a strategic, risk-aware approach, companies can navigate this evolving landscape with confidence and position themselves for long-term success.

Gopolang Kgaile is a Partner and Zinhle Gebashe an Associate | Webber Wentzel

This article first appeared in DealMakers, SA’s quarterly M&A publication.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Financing East Africa’s junior miners: bridging the capital gap

Noreen Kidunduhu
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Financing East Africa’s junior miners: bridging the capital gap

For all the geological potential East Africa offers, the region’s junior miners remain caught in a familiar bind: promising assets, ambitious growth plans, but a stubborn lack of risk capital to bring projects to scale. Over the past three years, a handful of juniors with projects in Kenya, Tanzania and Ethiopia have tested the market, often relying on small equity placings, shareholder loans or piecemeal project-level deals to stay afloat. The result is a funding landscape that is still shallow and episodic, limiting the pace and scale of development.

Micro-raises and shareholder dependence

For most East African juniors, listings or dual listings on exchanges or their sub-markets is the most accessible route to capital. These are typically accompanied by small equity placements, often heavily reliant on existing shareholder support.

East Africa-focused Caracal Gold plc, for example, has leaned on this approach. Since 2023, the company has completed several modest equity raises, typically under £1 million each (RNS, April 2024). Proceeds have funded resource expansion and, more recently, restart plans following the suspension of production in early 2024. Yet Caracal’s market capitalisation hovers between £3-5 million (LSEG Market Data, 2025), underscoring the difficulty of scaling through micro-capital injections.

In Tanzania, Katoro Gold plc, an early-stage explorer in the Lake Victoria Goldfields, has walked a similar path. Its most recent £350,000 placing in Q2 2025 (AIM News, May 2025) follows a string of micro-placements stretching back to 2023, each just enough to fund incremental exploration and corporate overheads.

While these equity raises provide essential lifelines, they limit project advancement and keep most juniors in a cycle of dilution and underfunding.

Consolidation as an exit

By contrast, larger, cash-generative African producers are taking a different approach to East African gold. Perseus Mining’s A$260 million acquisition of OreCorp in 2023 gave it control of the 3Moz Nyanzaga project in Tanzania, now one of the most advanced gold developments in the region. Perseus gained a pipeline asset it could fund directly from internal cash reserves (ASX announcements, September 2023). Subsequent early works at Nyanzaga have been financed entirely from operating cashflow, avoiding external debt or equity dilution (Q3 FY25 Results, June 2025).

This is an advantage few juniors can hope to match. As such, acquisitions are another viable option for undercapitalised juniors with quality assets.

Project-level funding

Some juniors in the region are also exploring project-level financing structures tied to offtake or prepayment arrangements. For instance, Katoro Gold has publicly disclosed ongoing discussions with potential offtakers to fund its next phase of resource drilling (RNS, 12 June 2025). Similarly, Caracal Gold is evaluating offtake-backed financing structures to support Kilimapesa’s restart plans (RNS, 28 March 2025).

While East Africa has yet to see a large-scale streaming or royalty deal for a junior mining project, the concept is gaining traction in boardrooms as successful stories emerge from other parts of the continent, like the Pan African Resources’ $20 million gold prepayment facility for its Mintails project in South Africa (FY24 Results, August 2024) that has shown how offtake-linked structures can bridge the pre-production funding gap.

Hybrid approaches and creative structuring

Ultimately, juniors will need to employ innovative and hybridised models to bridge funding gaps. Shanta Gold, an East African producer, offers a useful case study. In 2023, the company raised approximately US$20 million via a convertible loan note to advance drilling and feasibility work across its portfolio, including the West Kenya project (RNS, June 2023). Shanta continues to leverage its DSE listing and free cashflows from its New Luika and Singida operations for funding flexibility (Q2 Operational Update, July 2025). While Shanta benefits from production scale that juniors lack, its use of blended capital structures points to the kind of creative solutions others may need to pursue.

Another example is East Africa Metals, which is pursuing a project-generator model. Instead of focusing on fully developing a single asset, the company has built a portfolio across Ethiopia and Tanzania, advancing projects like Harvest and Adyabo. This model involves identifying and acquiring promising mineral properties to initially explore, and then optioning or selling these projects to partners. This approach reduces balance sheet strain while keeping the project pipeline moving.

DFIs may also play a bigger role in bridging the capital gap. Institutions like the African Finance Corporation and Afreximbank have shown increasing appetite for resource-sector infrastructure and development-stage funding, albeit more commonly for larger-scale projects. Their evolving mandates may open new pathways for East Africa’s juniors, particularly as projects advance toward feasibility stage.

Crossing the chasm

East Africa sits atop world-class gold geology and global demand for critical minerals and precious metals remains strong. Yet without access to deeper pools of risk-tolerant capital, be it private, institutional or strategic, many of the region’s juniors risk staying stuck in exploration limbo.

Bridging East Africa’s junior mining funding gap will require more than incremental raises and patchwork financing. It will require a structural rethink: greater use of project-level and hybrid capital, stronger engagement with strategic partners, and a more active courting of global capital willing to invest in the region.

Noreen Kidunduhu is the Founding Principal | Noreen & Co and is an ILFA Alumni

This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.

DealMakers AFRICA is a quarterly M&A publication
www.dealmakersafrica.com

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