What do Phil Roux and Peresec have in common? A2 Investment Partners, perhaps.
Roux pulled off a remarkable turnaround at Nampak after being slotted into the CEO position by A2 Investment Partners back in 2023, after they’d built up a strategic minority stake in the packaging company. In February, with Nampak’s share price roughly 180%, he handed over to Riaan Heyl.
Last May, he was appointed to the board of Novus, a company controlled by A2 Investment Partners. Now the directors of the Spar Guild, which represents the independent retailers, have said they want Roux to be appointed Spar chairman.
Then there’s Peresec, the broker and financial services provider. Earlier this week Spar announced that Peresec had acquired almost 6% of its shares, taking its stake to 6.25% of the struggling retailer.
It was Peresec, remember, that bought up shares and worked with A2 Investment Partners in their moves on Nampak, Novus and York Timber.
So, it’s not at all unreasonable to wonder if A2 Investment Partners isn’t planning to make some sort of play for Spar.
Neither is it unreasonable to suspect the prospect of such a move might have unsettled some of Spar’s long-term shareholders as well as some board members.
Coronation sells out
Coronation Fund Managers, which has been one of Spar’s largest shareholders for several years, sold most of its shares this week. A Coronation spokesperson told the FM its clients no longer hold any Spar shares. Coronation was believed to have been instrumental in securing the appointment of Mike Bosman back in December 2022 when former chairman Graham O’Connor was forced to resign.
Bosman, however, resigned from the board last month.
When asked if they might be interested in getting a stake in Spar, A2 Investment Partners’ Adrian Zetler said: “strange question”.
As for Roux joining the board, Zetler said, “If he gets involved it could be very interesting.”
Yet there’s been Guild-sourced speculation about Roux’s appointment for over a week, which suggests the Guild, or members of it, may be onside with A2. That no announcement has been made indicates, perhaps, that there is some opposition to Roux and possibly A2 Investment Partners playing a role in efforts to rescue Spar.
Roux doesn’t have a blemish-free track record, but his performance at Nampak has earned him enthusiastic support from investors. “He pulled off an amazing turnaround at Nampak,” Opportune Investments’ Chris Logan tells the FM. “He’s very good”.
And let’s face it, Spar could do with someone “very good” who knows a thing or two about turning around businesses that seem dangerously close to the scrap heap. One analyst suggested Roux would be better suited to the CEO role, with current CEO Reeza Isaacs slipping back into the CFO position.
Power of persuasion
The thing is, not everyone likes A2 Investment Partners’ style, so maybe there’s some persuading going on. This could explain why the Guild and Spar board are falling over themselves to assure investors there’s no dissension in the Spar camp. In response to speculation about Roux being in the running for the chairman’s slot, both sides have publicly stated they are committed to working with each other.
“The Guild Retail directors are committed to working constructively with both the board and the executive leadership of the group,” said the Guild Retail Directors in a statement released on Wednesday. “Our focus is on rebuilding confidence among retailers, employees, customers and shareholders and on giving the executive team the platform and support required to deliver.”
The Spar board promptly followed with its own commitment to constructive engagement.
“The focus of both the Board and management is firmly on executing the turnaround plan, strengthening operational performance, restoring retailer profitability and delivering sustainable value for retailers, employees, suppliers, customers and shareholders,” it said.
Speculation about an imminent appointment was evidently off the mark. “No appointments have been confirmed,” said the board. And it went further, in what seems an effort to quash expectations that Roux was a shoe-in.
“In relation to board succession and renewal, a formal and independent process is underway. To ensure the strongest candidates are identified, a search firm has been appointed to lead the process. The candidates proposed by the Guild will be considered against the same criteria and on the same basis as all other candidates.”
Still, the market evidently likes the prospect of Roux being involved, with Spar’s shares up over 5% on Thursday, closing at R44.55.