Long4Life, the investment company headed by the JSE’s deal-making doyen, Brian Joffe, appears to have developed an appetite for eateries.
The latest shareholder register for restaurant business Spur Corp shows the presence of Long4Life via two subsidiaries, Long 18 and Long 36.
These entities have recently accumulated close to 1-million shares in Spur with a value of around R22m.
While this is still a small foray, the possibility of cash-flush Long4Life building a more influential stake in Spur might not be an unreasonable prospect.
Long4Life’s investment strategy involves taking positions in lifestyle-focused consumer companies. The group’s portfolio spans Sportsmans Warehouse and Outdoor Warehouse as well as beauty outlet Sorbet and beverages (Chill Beverages and Inhle Beverages).
Spur — which aside from its eponymous family restaurant brand also owns RocoMamas, Panarottis, Hussar Grill and John Dory’s — would fit Long4Life’s investment criteria. It is a conservatively managed operation that is strongly cash-generative with well-established brands that have the potential to be scaled globally.
After the exit of empowerment shareholder Grand Parade Investments, Spur has no outright controlling shareholder.
Its shareholders include investment houses Allan Gray, Coronation, Fidelity and Investec as well as the Government Employees Pension Fund, which collectively hold around 40% of the issued shares.
Long4Life would not elaborate on the Spur position. A spokesperson said: "Long4Life is in a closed period and the company is not in a position to provide comment."
Long4Life has been known to take opportunistic positions in listed companies. The group built a small position in Clover before the diary business was subject to a takeover offer from a global beverages conglomerate.
Market watchers note that Joffe’s acumen could spice up the restaurant franchisor’s cautious expansion recipe. They did caution that Long4Life would need to build a far bigger position to have any influence at Spur.
At a recent AGM Joffe expressed a preference for snagging larger deals rather than chasing an array of smaller transactions.
The group, at last count, had a net cash balance of around R1bn with a cash acquisition capacity of around R2bn if gearing is introduced. In other words, Long4Life could take a commanding slice of Spur — which has a market value of around R2.6bn — if enough shareholders were prepared to dish up their scrip.
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