Bidvest eyes UK listing

Bidvest is considering a London listing for its food business to help fund growth, the company said after announcing an 11% rise in annual profit yesterday.

Bidvest's diverse operations - from car dealerships to shipping and office furniture - make it South Africa's second-biggest company by sales but it has long acknowledged the need to separate its food business from the rest of the group because its true value was not fully reflected in its share price.

"Markets are particularly buoyant, money is cheap and there's quite a lot of demand for this particular asset," Bidvest CEO Brian Joffe said yesterday.

Bidvest, which in 2011 rejected buyout bids on the grounds that they would not have benefited shareholders, said yesterday that the separate listing would unlock value because it is becoming increasingly difficult to fund growth with a South African balance sheet.

Joffe said the food division was considering entering the US through acquisitions but that such deals would put strain on the group's cash flow unless the business could fund itself.

"The kind of money involved to pursue an acquisition in the US is quite significant and therefore one has to consider how to fund the business," he said.

The food-service business, Bidvest's biggest division and one that contributes more than half the company's R183.6-billion in sales, supplies restaurants and hotels in Europe, South America and Asia.

Bidvest is largely insulated from weak demand at home, thanks to its operations in Europe and Asia.

Group sales increased to R183.6- billion, with the rand's weakness serving to boost returns from sales made in foreign currencies.

Bidvest also said it had not made a decision on whether to take control of struggling South African drugs-maker Adcock Ingram. Citing a Competition Tribunal document, Reuters reported last month that Bidvest intended to increase its stake in Adcock to more than 50%.

"Given uncertainty around trading performance, Bidvest has not determined whether to take steps to achieve control," Joffe said.

Adcock, in which Bidvest owns about a third, reported a hefty nine-month loss last week after writing down everything from drug inventory, factories and trademarks to businesses in Ghana and India.