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Bidvest says no to sale, shares fall

Johannesburg - Shares of The Bidvest Group [JSE:BVT] fell more than 2% in early trade on Thursday after the industrial conglomerate said its board recommended against a demerger of the group's food business.

Bidvest last month received unsolicited bids for its food unit, which an industry source said would be as high as $4bn.

Earlier the group announced that it plans to purchase foodservice businesses in Egypt, the Baltics, and Chile - its first entry into the high growth South American market.

This move follows a strategic review of the group's foodservice business.

Bidvest said the board has completed its strategic review which had resulted in various unsolicited proposals.

"These proposals highlight that the business is a highly rated and appealing strategic asset. Despite the current difficult economic environment the review confirmed that the business can continue to grow both organically and acquisitively," Bidvest said.

"In assessing the proposals the board strongly endorsed the Bidvest business model and reemphasised that a demerger should not take place if it is at the expense of critical mass and financial strength."

The board concluded that, while in the short term the proposals would have realised significant amounts of cash, they would not have optimised value nor the strategic benefits that are likely to flow from the current Bidvest structure over the medium term.

"Bidvest remains focused on identifying avenues for growth in the business and in this regard Bidvest is pleased to announce that it has concluded Memorandums of Understandings to purchase foodservice businesses in Egypt, the Baltics, as well as in Chile, its first entry into the high growth South American market."

Bidvest shareholders are no longer required to exercise caution in dealing in their Bidvest shares. 
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