Drop the caution folks, it is no longer required. That is what Bidvest are telling the market this morning, you no longer need to exercise caution when dealing in the company's shares. Of course the announcement is related to their Foodservice business. Here is a copy paste from the official release:
"The Board of Bidvest ("the Board") has completed its strategic review of the Foodservice Business ("Business") resulting from the receipt of various unsolicited proposals. These proposals highlight that the Business is a highly rated and appealing strategic asset. Despite the current difficult economic environment the review confirmed that the Business can continue to grow both organically and acquisitively."
OK, and what then did the board decide? They decided that whilst in the short term the proposals would release a large pot of cash, the board and the business should not go ahead with the demerger. Because I would like to agree with the board, this is perhaps not the time to be selling businesses. Because if anyone knows about that, CEO Brian Joffe has the best touch amongst South Africans. Thanks. But the prospect of an unbundling and realisation in the future still exists and an unlock of value for existing shareholders is still a proposition. If not today then the future. The market is taking a caning, but they are down more than five percent today on this news.
But that is not the real reason why Bidvest are down five percent. Instead of selling,
they are buyers of services businesses, in Egypt, Chile and the Baltic region (Croatia, that area). Excellent, well done chaps.