Johann Rupert

In what might be regarded as evidence that the Rupert family is gradually distancing itself from tobacco, Reinet Investments sold off 5m shares in British American Tobacco (BAT) in late November and early December.

Reinet chairman Johann Rupert said the 5m BAT shares were sold over a three-week period at an average price of £32,50/share with sale proceeds topping £160m (roughly R2,25bn).

He said proceeds would be used to fund Reinet's "continuing investment programme", including a recent commitment to invest another £300m into UK-based financial services specialist Pension Corporation Group.

The Rupert family has a long association with tobacco and built the old Rembrandt empire - which later split into Richemont and Remgro - on some of the world's best selling cigarette brands. Until recently BAT (and before that Rothmans International) provided a reassuring substantial cash flow underpin to well-known Remgro and Richemont.

Remgro and Richemont unbundled their respective holdings in BAT in 2008 but new Rupert-controlled investment entity Reinet retained a 5% stake in BAT as a form of currency to fund deal-making endeavours.

Reinet's third-quarter management statement shows a remaining stake of 4,1% or 793m shares in BAT - worth just over €3bn (or around R36bn). There was no indication in commentary accompanying Reinet's latest management statement that the company would be looking to offload further shares in BAT.

Last year Reinet raised a £300m financing facility linked to a put and call option on its BAT shares.

I-Net Bridge's latest shareholder register for SA shareholders of BAT shows Rupert family-aligned entities - Rembrandt Trust (2m shares), the Rupert Trust (2,1m shares) and the Rupert Foundation (1,2m shares) - still retaining interests in the tobacco giant.

Interestingly, Remgro, despite the unbundling exercise in 2008, still retains 1,25m shares in BAT worth R575m. This "leftover" stems from Remgro shares repurchased ahead of the BAT unbundling.