Johann Rupert, South Africa’s richest man, to divest $1.5 billion in British American Tobacco shares

Feyisayo Ajayi -
Key Points
  • Reinet Investments plans to divest its $1.5 billion stake in British American Tobacco, marking the end of its long-term holding.
  • Proceeds will fuel diversified investments via Reinet Fund S.C.A. F.I.S.'s investment initiatives, ensuring the portfolio remains adaptive to market conditions.
  • The divestment, driven by Rupert’s leadership, supports Reinet’s strategy to adapt to market conditions and focus on diverse global investments.

Reinet Investments, an international investment firm controlled by South Africa’s richest man Johann Rupert, has unveiled plans to divest its entire stake valued at £1.22 billion ($1.5 billion) in British American Tobacco p.l.c. (BAT), the world’s largest producer of cigarettes.

This move aligns with Reinet's broader investment strategy to optimize its portfolio and enhance liquidity.

Strategic move to exit BAT holdings

The Luxembourg-based investment vehicle, via a recent JSE update, announced plans to sell 43,310,286 BAT shares—approximately 1.96 percent of BAT’s ordinary share capital—through its subsidiary Reinet Jersey Holdings Limited (RJHL).

Under Luxembourg Stock Exchange rules, the shares will be sold to institutional investors at £28.20 ($34.11) each through an accelerated bookbuild process, with J.P. Morgan Securities plc serving as Sole Global Coordinator and Bookrunner.

This follows a prior sale of 5 million BAT shares through a dribble-out process on the London Stock Exchange, which generated gross proceeds of £148.5 million ($180.92 million). Combined with this latest transaction, Reinet's exit marks the culmination of its long-term holding in BAT, which previously constituted 24 percent of the company’s net asset value as of Sept. 30, 2024.

Market implications and strategic realignment

This divestment underscores Reinet’s pivot toward reallocating resources for ongoing investment activities. The proceeds will facilitate Reinet Fund S.C.A. F.I.S.'s investment initiatives, ensuring the portfolio remains adaptive to changing market conditions.

BAT, a global tobacco leader, will not receive any proceeds from the sale. The completion of the transaction is scheduled for January 16, 2025, marking the end of Reinet’s association with BAT.

Johann Rupert’s leadership and vision

Reinet was established in October 2008 after demerging from Swiss luxury giant Richemont, inheriting Richemont’s stake in British American Tobacco (BAT) as its primary asset. South African billionaire Johann Rupert, who owns 24.9 percent of Reinet, is Africa’s richest man, with a net worth of $11.6 billion. His stake in Reinet is valued at $1.14 billion.

Since its inception, Reinet has been guided by Rupert’s leadership, focusing on strategic adjustments to its portfolio that seek to enhance shareholder value. These changes have diversified investments across different sectors and geographies. The decision to exit BAT aligns with broader industry shifts, including increasing regulatory pressures and changing consumer habits, demonstrating Reinet’s adaptability in ensuring long-term sustainability.