Byline: Andrew McNulty
RICHEMONT/REMGRO/REINET Happy returns The success of the Rupert family investments lies in their diversity, as discovers WHAT IT MEANS.
Rupert companies did better than many.
Stability and growth are still attractions Reinet was formed with the goal to maintain shareholders' wealth over the medium term JOHANN RUPERT Companies controlled by the Rupert family have made several disappointing investments. One was the Swiss-based luxury goods group Richemont's venture into electronic media in the second half of the 1990s.
Like Naspers CE Koos Bekker, Richemont CE Johann Rupert saw potential for high returns in electronic media. In 1995, Richemont formed a partnership with Naspers and invested in Nethold, a pay-TV company in Europe. It grew quickly but required large investments and faced growing competition. It mostly made losses or small profits.
By 1999, the investment had evolved into a 15% stake in French-based Canal+, then Europe's leading pay-TV group. Richemont swapped its Canal+ stake for a small holding in the TV company's holding company, Vivendi, a French utilities group with media and communications investments. It was the first step in a prescient withdrawal.
Richemont hedged the value of the shareholding at about & 8364;1,2bn and in 2001 reported an exceptional gain of & 8364;533m after selling the Vivendi stake in September 2000, just as valuations of media and technology stocks including Vivendi were collapsing.
Earlier in the 1990s, Rembrandt Group acquired a large stake in Gold Fields of SA (GFSA). Rupert told the FM it was intended partly as a hedge against weakness in the world economy and the rand. However, the 1990s were a poor decade for gold and the SA gold producers. In 1999, GFSA restructured and unbundled its gold division.
Shortly afterwards, Remgro (Rembrandt's successor) struck a deal with Anglo …