Strong interest in South Africa’s Quantum Foods

Several entities have shown interest in gaining a stake in South Africa-based poultry company, Quantum Foods.

Phongphan | Bigstock.com
Phongphan | Bigstock.com

Several entities have shown interest in gaining a stake in South Africa-based poultry company, Quantum Foods.

Over the past month, share price of Quantum Foods has risen by as much as 80%, reports Business Day.

Among others, interest in the broiler and egg integrator has come from four members of the firm’s own board. They have recently purchased shares to a total value of around 20 million rand (ZAR; US$1.2 million). With additional purchases of ZAR15.8 million, board chair Wouter Hanekom is now reported to hold a 5.2% share of the company.

Market capitalization is ZAR1.4 billion, according to the report.

Last month, South African poultry producer Country Bird Holdings (CBH) had indicated an interest in purchasing the remaining shares in Quantum Foods. Already with a 30.81% stake in the firm, CBH subsequently stepped back from this offer.

Initially, CBH had regarded egg specialist Quantum Foods as a “good fit” for the company as a poultry meat producer. However, within days, CEO Marthinus Stander stated CBH was not interested in being involved in a bidding war for Quantum.

Latest offer from Luxembourg-based fund

In the past week, another bid has been received by Quantum Foods for about 32% of its shareholding. From a notice to the Johannesburg Stock Exchange (JSE), Quantum Foods has identified the source of the latest bid as the fund, Silverlands II SCSp. Based in Luxembourg, the fund invests in the agricultural sector in sub-Saharan Africa, on behalf of its investors. These comprise primarily institutional investors advised by SilverStreet Capital LLP, an investment regulated in the United Kingdom.

Both the fund and SilverStreet are expected to be long-term investors. Through a wholly-owned subsidiary, Aristotle Africa S.à r.l., the fund has entered into binding agreements with certain institutional shareholders to acquire just over 62.1 million ordinary shares in Quantum Foods at a price of no more than ZAR6.00 each. These represent around 32% of the issued shares.

One month ago, Business Day reported that Zeder Investments had sold its share in Quantum Foods to CBH.

Zeder had held shares in Quantum ever since it was unbundled from Pioneer Foods in 2014. The group reported it had disposed of its 61.6 million shares in Quantum Foods for ZAR5 per share.

More on Quantum Foods

With annual slaughterings of just under 40 million poultry, and with almost 5.2 million laying hens, Quantum Foods is among the largest poultry companies in Africa, according to the Poultry International Top Poultry Companies database.

Based in Wellington in South Africa’s Western Cape Province, Quantum Foods focuses primarily on animal feed and egg production, layer and broiler farming, and related businesses. The company is also active in Zambia, Uganda and Mozambique.

Nulaid, the company’s egg-layer division, is the largest egg producer in South Africa and the only national producer. For its layer and broiler farming operations, Quantum Foods owns import rights to Cobb 500 pedigree grandparent broiler stock, for both internal use and for sale to customers outside of South Africa. Quantum operates two hatcheries for day-old commercial broiler chicks, after which the birds are transferred to both company-owned and contract grower farms.

Subsidiary Nova Feeds supplies feed for broilers, layers, dairy cattle, sheep, swine and ostriches. It is rated in the Top 10 animal feed companies in Africa, according to the latest Feed Strategy Top Feed Companies database.

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