Rupert wields a R10bn bat to cut 40% discount for Reinet’s small shareholders

By Alec Hogg

It’s been a while since I’ve managed to spend time with South Africa’s leading businessman, Johann Rupert. But I did manage to catch him yesterday en route from the airport as he returned from an Annual General Meeting sure to be cheered by thousands of Reinet shareholders.

Johann Rupert, founder and chairman of Cie. Financiere Richemont SA. Photographer: Chris Ratcliffe/Bloomberg

The company named after the Rupert family’s Karoo roots in Graaff-Reinet was created in 2008 as a vehicle to hedge against stock exchange crashes. But with bulls rampaging for the past decade, the defensively positioned Reinet’s shares have been unfashionable, trading at a 40% discount to the value of its underlying assets.

Rupert believes this makes the small shareholders vulnerable to professional investors who are sniffing around for bargains. So he has promoted a plan that will see up to R10bn in Reinet shares being bought by the company in the open market – forcing a narrowing of the discount and ensuring private investors who do sell will get a reasonable deal.

What sparked the timing of this buyback of 20% of the company’s shares is a story in itself. One covered in some detail during our interview that’s accessible via my free-to-air Rational Perspective podcast (google it and subscribe). The transcript is available in Biznews Premium. One for today’s notebook.