“It is very, very precarious,” Rupert said at the annual general meeting in Cape Town of Remgro Ltd., where he is also chairman. “There will be tears, but we don’t know when, and we don’t know whether it’s going to be a big inflation or whether it’s going to be a depression. Just hedge your bets.”Remgro is an investment holding company with interests including banking and financial services, packaging, wine and spirits, and personal care products. Rupert said that if the global economy doesn’t do well, Remgro is still well positioned, while Richemont isn’t.“The luxury goods market is very cyclical and relies on consumers discretionary spend,” Rey Wium, an analyst at Renaissance Capital in Johannesburg, said by telephone. “When times are tough, consumers will tighten their belts.”
My question is: Which share price will benefit the most, Remgro or Caxton?That is the one I need to own.
Earlier in the meeting, Rupert interrupted proceedings to tell shareholders: “We’re not interested in going into the print media.” He was responding to recent media speculation that Remgro’s involvement in the buyout of ElementOne’s stake in Caxton was the start of a bid to move into the media industry. “It’s amazing how the print media finds its own industry so interesting,” Rupert said about the speculation on the offer from Bidco for the Caxton stake. Bidco comprises RMB Investments, Remgro and Caxton directors Terry Moolman and Noel Coburn. Rupert said Remgro had an effective shareholding of less than 7 percent in Caxton. “These are shares that we acquired about 20 years ago when there was a huge fight between Naspers and Perskor.” Caxton subsequently acquired Perskor. Rupert said part of Remgro’s holding in Caxton would be used in the new structure that would control Caxton after the ElementOne buyout. “We are not contributing any cash, we are merely helping to unlock value,” Rupert said. He added that if Caxton’s profit increased two-fold or even four-fold it would not make a difference to Remgro. “It would make a difference to Moolman but not to us.”
