Billionaire Johann Rupert’s surprising decision
Billionaire Johann Rupert’s Reinet Investments announced that it is selling its shares in British American Tobacco, which marks the end of an era for the Rupert empire.
The Rupert family’s wealth was built on tobacco. Johann Rupert’s father, Anton Rupert, established Voorbrand, a tobacco company, in the 1940s.
Voorbrand was the forerunner of Rembrandt, which entered the South African cigarette and tobacco industry in 1948.
Rembrandt was a runaway success in South Africa, listing on the JSE less than a decade after being founded.
In the 1970s, Rembrandt expanded into other industries, like financial services, mining, engineering and food.
Rembrandt and the Rupert-controlled Richemont consolidated their tobacco interests in Rothmans International in 1995.
A few years later, these tobacco interests were merged with those of British American Tobacco (BAT).
In 2008, Richemont’s non-luxury-related activities, which housed its tobacco interests, were spun off into Reinet Investments.
Reinet’s principal asset is Richemont’s former interest in British American Tobacco, which accounts for 24% of its net asset value.
On Tuesday, 14 January, Reinet announced that it had agreed to sell its shares in British American Tobacco.
In the company’s latest interim results for the six months through September 2024, Reinet held 48.3 million shares in BAT, representing around 2.18% of BAT’s issued share capital.
Reinet said it had agreed with J.P. Morgan Securities to sell 43,310,286 ordinary shares in BAT, representing 1.96% of BAT’s ordinary share capital.
It will sell the ordinary shares in British American Tobacco to institutional investors for £28.20 per share, raising gross proceeds of around £1.22 billion.
This sale will be done through a secondary placing of shares conducted by its subsidiary, Reinet Jersey Holdings Limited (RJHL).
The sale will be conducted through an accelerated bookbuild process, which is a fast-track method of selling large volumes of shares to institutional investors.
The process began immediately after the announcement this morning and is subject to market demand, price, and conditions.
A follow-up announcement will disclose the pricing and completion details once the bookbuild is finalised.
Before this secondary placing, RJHL had already sold 5 million BAT shares during November and December 2024 through a “dribble-out process”.
These earlier sales raised approximately £148.5 million (R3.44 billion) in gross proceeds.
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