South Africa's listed consumer companies have been through the wringer in the last five years and their earnings and valuations reflect this. This does not mean that there is no value to be had. There is, and foreigners are paying attention.
For months market watchers have commented on the fact that South African stocks are trading well off their highs and pockets of value are beginning to open up, but now it seems others are beginning to notice too.
US-based PepsiCo, the second-largest soft-drink maker in the world, has made an offer to acquire 100% of Pioneer Foods, the producer of Sasko bread, Weet-Bix, Pro-Nutro, Spekko rice and White Star maize meal. It is the second-largest food producer in South Africa, after Tiger Brands. PepsiCo has offered R110/share which equates to about $1.7-billion, a premium of 56% on the average share price in June and July.
This is the second offer this year by an international firm for a local food company. In February a consortium, led by Tel Aviv-based Central Bottling Company, made an offer to acquire the entire issued share capital of Clover for R25 per share.
Business Maverick noted recently that there is value to be had...