Kunene Technology Holdings is considering unbundling its stake in Grintek.
The group`s share price rose 75c or 15.79% to 550c by mid-morning as shareholders reacted to the news.
Grintek, a defence and telecommunications company, is Kunene Technology Holdings` sole underlying asset.
Grintek increased its pre-tax profit 78% in its latest financial year, while headline earnings rose 43%.
Although the telecommunication division suffered from an industry slowdown, Kunene management said at the time that it still performed acceptably for the period.
An analyst says the Kunene brothers are involved in several unlisted businesses not related to Kunene Technology Holdings.
Kunene Technology Holdings, which owns about 58% of Grintek, is held by Kunene Finance Company, itself 50.1% owned by Kunene Brothers Holdings.
While unbundling the Grintek stake would leave Kunene Technology Holdings as a cash shell, there may be plans to use that shell.
One possibility would be to use it to reverse list one of the other entities in the Kunene family`s holdings.
The analyst says that despite the fact that Grintek has warned that its profits for the interim period to end-December may be marginally lower than those of the year-earlier period, it is a good company, even though the defence business is cyclical in nature.
"They have a lot of cash and they`re not small anymore," he adds.
Kunene Technology Holdings` cautionary notice offers no details about pricing, but only warns shareholders that the unbundling would have a material affect on the Kunene share price.
The Grintek share was untraded at 250c this morning.
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