Johann Rupert's "aha" moment sparks Reinet's R10bn share buyback
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South Africa’s leading businessman, Johann Rupert, has taken the empire inherited from his father to another level. In 1988, just three years after joining his father Anton’s industrial group Rembrandt, Rupert junior created Richemont, today one of the world’s top luxury goods businesses.
When Richemont restructured a decade ago, its 80m shares in British American Tobacco, some other investments and 350m euros in cash was injected in the newly established Reinet Investments, named after the Rupert’s original Karoo hometown, Graaff-Reinet.
As we hear from Rupert, this company was created as a hedge against a market crash – but because of the lengthy bull market, its share price trades at a discount of 40% to the value of its assets. Rupert reckons that makes the thousands of small shareholders vulnerable to giving up their investments at a discount, so at today’s annual general meeting in Luxembourg, it was announced Reinet will buy back up to 20% of its own shares in the open market, narrowing that discount as the price rises. At the current share price the project could run to almost R10bn.
When Richemont restructured a decade ago, its 80m shares in British American Tobacco, some other investments and 350m euros in cash was injected in the newly established Reinet Investments, named after the Rupert’s original Karoo hometown, Graaff-Reinet.
As we hear from Rupert, this company was created as a hedge against a market crash – but because of the lengthy bull market, its share price trades at a discount of 40% to the value of its assets. Rupert reckons that makes the thousands of small shareholders vulnerable to giving up their investments at a discount, so at today’s annual general meeting in Luxembourg, it was announced Reinet will buy back up to 20% of its own shares in the open market, narrowing that discount as the price rises. At the current share price the project could run to almost R10bn.
