Bird flu boon for SA companies

Christmas has come early for Astral and RCL (formerly Rainbow) with the rather grim news that bird flu has re-emerged once more in Europe.

There hasn't been much media coverage of the latest outbreak, but given the recent strengthening in the share prices, particularly Astral's, it's pretty obvious that some investors are joining the dots.

It seems the Department of Agriculture, Forestry and Fisheries acted with unprecedented speed. This week, it placed an immediate suspension on poultry imports from the EU. So far, this strain of bird flu has been detected in the UK, the Netherlands and Germany.

According to Anthony Clark of Vunani, any product put on the high seas on or after November 19 will be rejected at South African ports.

Clark notes that this is without doubt the highest impact time for a ban on poultry imports. It is traditionally the peak season in terms of sales volume and prices.

In the past couple of years, the Netherlands became the biggest source of imported poultry product into SA. The local industry has been trying hard to get the government to impose duties on Dutch and German product.

For poultry consumers, many of whom are already suffering severe cost of living pressure, the resurgence of bird flu is grim news. But for the poultry companies and their shareholders it is great news.

As Clark says: "With imports from EU countries now off the shelves, local producers must be doing cartwheels to force-feed their birds to make up production."

Rex Trueform and African & Overseas Enterprises

Shareholder frustration at Rex Trueform and African & Overseas Enterprises finally spilled into the public arena with last week's annual meetings, described by one shareholder activist as "the most volatile AGMs I've attended in recent years". The major asset in this pyramid structure is clothing retailer Queens Park. It also has interesting properties and a chunk of cash. Rex Trueform shareholders with about 75% are trying to shake off shackles put in place by the Shub family, which through the pyramid structure, exercises control with an effective 7% stake in Rex Trueform. This structure caused some irritation when the group was doing well, but in the past few years its performance has been nothing short of dismal.

Shareholders have become extremely agitated. The company has drifted from earnings of 126c a share in 2009 to a loss of 49c in 2014.

The 75% shareholders, chief of whom are Brimstone and Hugh Roberts, have been trying for some time to break through the pyramid structure and exert some influence on the management of the company. But so far they have not even been able to secure representation on the board.

An unbundling of the structure would see Brimstone and Roberts get control of Rex Trueform and Queens Park, which is presumably exactly why the Shub family is resisting the move with all the wiles, including the law, at their disposal.

You do have to wonder why people buy shares in pyramid structures. There are very good reasons why the JSE no longer allows them.

Middelhoff and corporate helicopters

How the mighty have fallen. Thomas Middelhoff, former chief executive of the once powerful German media company Bertelsmann and a former member of the board of directors of The New York Times company, has been sentenced to three years in prison by a Frankfurt court.

They wouldn't even let him out while he appeals against the conviction, which was for embezzlement and tax evasion. The charges relate to his time as chief executive of Arcandor, which was once Germany's largest department store chain but went bankrupt in 2009. Middelhoff was forced out of the company in 2002.

According to the New York Times, "the court found that Mr Middelhoff took private flights on charter jets at the company's expense, and sometimes made unauthorised commutes by helicopter to Arcandor headquarters".

He will be the first CEO of a major listed German company to serve time in jail.

Khaya Ngqula must be hugely relieved that South Africans are so much more tolerant of their senior executives' hubristic need to travel by helicopter.

Times Media Group

With just the sort of communication skills we've come to expect from media companies, Times Media Group (which owns the Sunday Times) issued a Sens announcement on Friday, which led to some excitement and much confusion. This was reflected in the share price movement on the day. It closed 155c higher at R23, but fewer than 3 000 shares were traded.

The announcement said there were new developments relating to the company that might have a material effect on the price of the company's securities.

Not even the journalists in the group know what's going on. The best they could do was speculate that it was part of a "broader deal" TMG was working on.

It apparently has nothing to do with a tie-up between Cadiz and Blackstar, which is the controlling shareholder in TMG.

Something firmer is expected by the end of the coming week.