Two decades ago, while visiting Australia to assess a possible acquisition (we passed), I was invited by inimitable retailer Sean Summers to join a group of SA investment analysts scouting around the Pick n Pay operations. The group had recently acquired Franklins, an Australian lookalike for PnP, and a business for which Summers had high hopes.
It ended poorly with Pick n Pay eventually calling time on its Australian adventure in 2010, selling Franklins to Metcash – a group created by the SA business of the same name. Metcash is still led by a Saffer, Doug Jones, whose CV includes executive roles at Massmart and SABMiller. It is the leading wholesale distribution and marketing company in Oz – one of the few SA companies to flourish there.
Australia has been a graveyard for many South African businesses. Most notably WBHO which in February put its Aussie subsidiary Probuild into bankruptcy. Things could have turned out differently, but in early 2021 the Australian government blocked WBHO’s A$230m sale of Probuild to the China State Construction Engineering Corporation because it regarded Chinese ownership as inappropriate for such a “strategic” asset.
___STEADY_PAYWALL___Murray & Roberts shareholders will be hoping for a very different outcome following yesterday’s SENS announcement the group has reached agreement to sell its Australian subsidiary Clough to Italian multinational Webuild. The Milan-based company has a history of working with Clough on major projects, including two currently in operation.
The sale, priced at A$350m (R4bn), will liquidate an intercompany loan to Clough and ensure M&R shareholders wont have to throw good money after bad. Clough urgently needs a capital injection. With the share price jumping almost 20% on the news, some think M&R has dodged a bullet. A rare positive Australian-related outcome for a SA company.
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