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Pioneer tables formal KWV bid

Johannesburg - Pioneer Food Group [JSE:PFG] and KWV Holdings said on Monday that Pioneer has submitted a firm intention to make an offer to acquire 100% of the issued ordinary shares in KWV for R828m.

KWV is a commercial business focusing primarily on the wine and brandy industry locally and abroad.

Pioneer said its shareholders would benefit from the addition of a sizeable business which generates revenue in excess of R700m per annum, and which is expected to benefit from synergistic cost structures and improved economies of scale.

The total purchase consideration is the amount of R828m of which one-quarter shall be settled in Pioneer shares valued at R49.83 per share while the balance will be settled in cash.

The deal is subject to the fulfilment of the conditions precedent.

This includes that the KWV board ensures that the internal due diligence process is completed on or before January 31 2011.

The company may face rival bids from two other firms: Clover and UK-based spirits maker Halewood International.

Clover, due to list on the Johannesburg Stock Exchange on Tuesday, is interested in bidding for KWV, Clover's chief executive told the Business Day newspaper.

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