LISTED FOOD group Total Produce has increased its stake in South African fruit business Capespan, to 25 per cent.

The €13 million transaction will mean Capespan buys out Total Produce’s 50 per cent holding in Capespan International Holdings Limited. In exchange, Total Produce will gain 20 million additional shares in the South African company, plus €8.5 million cash.

Total Produce said it would use the funds for expansion. The company has been a joint venture partner with Capespan in Capespan International since 1999, when it was then still a part of Fyffes.

Capespan’s Europe-based subsidiary was established, initially, to distribute South African fruit in Europe. In recent years it has distributed fruit from across the world directly to retailers in Europe.

A spokesman for Capespan said it made sense for the subsidiary to have a single shareholder.

“Rationalising the shareholder base will allow us to bring the company forwards in what has been a challenging few years.”

Capespan, whose shares are traded over the counter in South Africa, has been at the centre of a bidding war this year between its two other main shareholders. Zeder Investments, which has been building up its stake in Capespan to 40 per cent, made a bid for the company in June.

This was followed by an offer from eight per cent shareholder Bidvest.

Total Produce, which originally held a 10 per cent stake in Capespan when it started its joint venture partnership with Capespan International, has been gradually building up its shareholding in the South African fruit group. It is now the second largest shareholder.

The share issuance is subject to approval from Capespan’s shareholders. Capespan also has operations in Asia, America and Europe. As well as its fruit export and logistics business it also operates ports.

The company had revenues of 2.6 billion rand in 2010.

Revenues at Total Produce rose seven per cent last year to €2.6 billion, boosted by a strong performance in Scandinavia.

In a trading update in September, the Dundalk-headquartered company said earnings per share grew two per cent in the first six months of the year, despite difficult trading conditions in some of its European markets as a result of the E.coli scare that hit Europe during the summer.

Earlier this week, Total Produce announced it had paid up to €15 million for a half share in Dutch fruit distributor Frankort Koning Beheer Venlo and its subsidiaries.