Quantum Foods, which witnessed a significant surge in its share price, experienced a setback as the rally bubble appeared to burst. The company's stock saw a 5.26% decline on the JSE following the confirmation of Country Bird Holdings' acquisition of Astral Foods' 9.4% interest.
The Quantum Foods share price surged by 104.4% between the closing price on March 1 and the closing price on Thursday, March 7.
“Quantum Foods’ shareholders are hereby advised that the company has received a notification, in the prescribed form, from Country Bird Holdings Proprietary Limited (CBH), advising that it has acquired a beneficial interest in Quantum Foods securities, such that CBH now holds a beneficial interest of 15.83% of the company’s total issued ordinary shares,” the company said yesterday.
However, on Monday the rally in the company’s stock price fell closed the day 5.26% lower at R9 on the JSE.
The past week’s rally in Quantum Foods’ share price was precipitated by a race to snap up stock in the company “at any price” by opposing shareholder blocks in the company as they bid for the control of the company, said analysts yesterday.
“It’s a shuffling of a deck of cards. You still have two opposing shareholder blocks. Both parties have been trying to contact the remaining individual shareholders to get to secure 50.1% controlling stake at any price,” Anthony Clark, an independent analyst at Smalltalkdaily Research, told Business Report.
Although Astral Foods has disposed of its stake in Quantum Foods, the two parties “still have a five year agreement regarding the raring of chickens”.
Clark said he believed Astral had disposed of its 9.4% interest in Quantum Foods “at a loss as it didn’t pay dividends” for much of the period it was invested in the company.
Quantum Foods supplies Astral with approximately 600 000 broilers per week for further processing, which makes up approximately 35% of County Fair’s total slaughter capacity.
BUSINESS REPORT