Famous Brands's stocks rise after buying stakes in Nigerian company
The stock, the sixth-best performer on the 62-member FTSE/JSE Africa Small-Cap Index this year, surged as much as 2.4%, the biggest jump since September 2 on an intraday basis, and was 1.5% higher at R99.96 by 1.14pm in Johannesburg.
About 181 000 shares traded, or 1.2 times the three-month daily average. Famous Brands will buy the stake in UAC Restaurants, which owns Mr Bigg’s, from UAC of Nigeria Plc, the company said in a statement on Monday.
“Historically, one of the key challenges of expanding into the rest of Africa has been to source suitable local partners,” Kevin Hedderwick, chief executive officer of Famous Brands, said in the statement. “This acquisition surmounts that obstacle.”
The company, which has Steers, Wimpy and Mugg & Bean restaurants among its brands, has a market value of R9.9-billion. It plans to open 55 outlets outside South Africa as sales growth elsewhere on the continent beats the local market, Hedderwick said on May 27. Sales on a like-for- like basis in the year through February jumped 28% in those markets, which now account for 7.3% of revenue. – Bloomberg