A senior executive from a top investment house in Cape Town once remarked: "Everything Christo Wiese does on the market is worth noting. Obviously we all know what an astute investor he is, but what is incredible is the huge positions he takes, sometimes in a highly geared fashion."
He has done yet more notable trades this past week.
Wiese dominated dealings, buying 1.48m Brait shares valued at R171.8m. While that’s small change in the context of the retail tycoon’s vast wealth, estimated by Forbes at US$7.5bn, Wiese is not known to risk his wealth where there will be no reward. He effected the trades through investment vehicles Incapart Investments, Cream Magenta 140 and Metcap 14. In his 50-year investment career, Wiese has seldom got investment decisions wrong.
He is always on the lookout for opportunities.
Brait’s main investments are its 80% stake in UK retailer New Look, which it acquired last year, 70.4% of gym company Virgin Active, and Premier Foods, the producer of Iwisa maize meal and Snowflake flour.
After snaffling both New Look and Virgin Active last year, Brait says it’s on the prowl for more deals. Aiding the hunt is its R4.3bn cash holding, together with other funding facilities.
"The firepower ensures that we are ready to execute on new investments," Brait CEO John Gnodde told Business Day in June. The firepower in Wiese’s control is not limited to Brait, or to his own personal portfolio. Wiese has also been dominating the directors’ dealings at Steinhoff International, the furniture manufacturer and retailer, of which he is the major investor and chairman.
Steinhoff, too, has been busy on the acquisitions front. In the past two months the company has concluded two sizeable acquisitions — a $2.4bn (R32.4bn) takeover of Mattress Firm and a £597m (R10.6bn) cash offer for UK discounter Poundland Group.
Still on the retail front, directors of The Foschini Group (TFG) were at it again.
CEO Doug Murray and three of his colleagues exercised some of their options. In terms of the company’s incentive schemes, Murray exercised options on 38,824 shares, paying R3.4m for the loot.
Presumably to find the cash, he sold almost 16,000 units of the stock to release R2.5m, at R155.36 per share.
That is almost double the R86.62/share at which he acquired the stock. That is the price TFG was trading at in 2011 when Murray and his colleagues were granted the performance shares.
The stock he exercised is less than half the 85,200 shares to which Murray is entitled. This came on top of his remuneration package of R12.5m last year. Since his appointment to the position in 2008, the stock of TFG has jumped five-fold to the current R155/share.
While that has beaten Truworths, TFG’s growth has been pedestrian when compared to Mr Price. The affordable fashion house has sprinted from a low of R15.15 in May 2008 to R226.50 now.
Other than the cheaper, "everyday fashion" that dominates the trading floors at its stores, Mr Price differentiates itself by selling mostly in cash. That has tended to shield the company from the vagaries of the poor economy SA has been experiencing for the past five years. Some of Murray’s colleagues, including chief information officer Brent Curry and Martin Mendelsohn, sold the stock as if it was going out of fashion, admittedly on very thin volumes.
They paid R3m and R1.2m to exercise their options. They both immediately flipped the stock in the market to take a gross profit of R2.1m and R1m respectively.