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Shares in Tiger Brands soar almost 6% higher as its CEO steps down

by , 25 September 2015

Earlier today, Tiger Brands announced that its chief executive officer, Peter Matlare, was stepping down from his position.

The statement from the company didn't divulge any more details about who would replace Mr Matlare.

Shares gained on the news.

Let's take a closer look at what's going on…

Investors greeted Tiger Brands’ CEO departure well

Shares in Tiger Brands [JSE:TBS] hit a four-month high on news that its CEO is leaving “at the end of the year,” reports Fin24. The company is now looking for a replacement.

Shares hit a high of R312.00, a rise of 5.7%, adds Fin24. This as the company’s seen its share price fall 16% this year so far.

Tiger Brands didn’t give any details regarding the CEO’s reasons for leaving, says IOL. But he will finish up in his post on 31 December.

But there have been pressures on the company as its “Nigerian venture Dangote Flour Mills, bought in 2012, has continued to cause pain to investors,” notes BDLive. This had led Tiger Brands to write down “about two-thirds of the transaction’s value”.

Its Nigerian venture isn’t the only aspect of concern.

Tiger Brands is losing vital market share to competitors

Sumil Seeraj, an analyst with Standard Bank, told Bloomberg that “investors were very concerned over the decisions that have been made”. For instance, the loss of a “significant market share in bakeries”. This allowed competitors to take advantage.

Pioneer Food Group [JSE:PFG] is now a major competitor to Tiger Brands in terms of bread sales, adds Bloomberg. This year, Pioneer’s shares have risen 36%.

At time of writing, shares in Tiger Brands were trading 5% higher at R310.79.

The new CEO of Tiger Brands will have to steer Tiger Brands towards better times ahead and claw back lost market share.

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Shares in Tiger Brands soar almost 6% higher as its CEO steps down
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