PFG and Zeder cautionaries raise speculation


PFG and Zeder cautionaries raise speculation

Published Date: 2019-07-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

PFG and Zeder cautionaries raise speculation

It was suggested that Pioneer may be about to make an acquisition or that Zeder could unbundle its stake in the food producer.

Pioneer Food Group and Zeder Investments both issued cautionary announcements yesterday, raising speculation about the deal they could be involved in.

Pioneer said it had entered into negotiations which may have a material effect on its share price if they are successfully concluded. Zeder, which is a large Pioneer shareholder, advised its shareholders also to exercise caution due to its hefty weighting in the group's investment portfolio.

Zeder is 43.8% owned by investment holding company PSG Group. Among its own investments, it holds 28.6% of Pioneer and almost 100% of Zaad Holdings, Capespan Group and The Logistics Group. It also owns minority stakes in Kaap Agri and Quantum Foods and a controlling stake in Agrivision Africa.

Pioneer remains its largest investment, making up 43.5% of its R10.8 billion portfolio at the end of February. That's down from 53.9% a year earlier following a sharp slide in the food producer's share price.

It's been suggested that Zeder may unbundle its Pioneer stake due to the negative impact it's had on Zeder's value over the past couple of years. However, other scenarios are that Pioneer may be poised to make an acquisition after a previous deal was cancelled in 2017 as the rand sagged on the back of credit rating downgrades or that PSG may be about to increase its stake in Zeder.

Pioneer's shares rose 1.6% to R71.45 yesterday while Zeder gained 3.7% to R3.64.

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