Two Tiger Brands directors, the CEO Peter Matlare and Nigeria business executive Thabi Segoale, received a sizeable allocation of the company’s shares last week in a fulfillment of a Black Economic Empowerment (BEE) promise.
The JSE listed branded food producer, Tiger Brands, announced on Friday last week that Matlare was allocated 58900 shares. Segoale was allocated 34000 Tiger Brands shares. The company said this was “Pursuant to the Tiger Brands Phase II Black Economic Empowerment Transaction…”
The effective date of these allocations is 1 January 2014.Tiger Brands shares closed at R264.80 on Friday which means the shares allocated to Matlare were valued at about R15m. However, Matlare will not realise all this value as there are significant costs of ownership of these shares and mainly financing costs. The beneficiaries of this deal are also locked in until 31 December 2017.
Tiger Brands concluded phase two of its BEE initiative in 2009. The transaction significantly boosted Tiger Brands BEE credentials as reflected in our database. In this transaction the company sort to transfer about 10% of its shares to a BBBEE consortium. The consortium included Brimstone Investment Corporation which was allocated 1.01% of Tiger Brands’ shares. There was also the Tiger Brands General Staff Share Trust (0.44%), Thusani Trust 1.01% and Tiger Brands Foundation (5.05%).
Matlare and Segoale are benefiting from an allocation to the Tiger Brands Black Managers Trust II which received 1.58% of Tiger Brands` shares.
Back in 2009 Tiger Brands said that “This was in addition to the shares already held by the Tiger Brands Black Managers Trust in terms of Tiger Brands phase I black economic empowerment transaction implemented in October 2005 which represents a further 2.45% of Tiger Brands` enlarged issued share capital. This results in a total combined shareholding of 4.03% in Tiger Brands` enlarged issued share capital.”
In establishing the transaction in 2009 Tiger Brands reasoned that the transaction builds on the success of the Phase I whose objectives included the following:
– achieving approximately 30% black ownership, excluding mandated investments and foreign operations
– benefiting a broad base of community and regional groups;
– assisting in retaining existing black staff;
– attracting top black professional and management skills to the Company;
– preserving and enhancing Tiger Brands’ current business in South Africa