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KWV bid: Pioneer drops bombshell

Dec 14 2010 06:21
Hennie Duvenhage

Cape Town - On Monday Pioneer Food Group [JSE:PFG] dropped another bombshell with its announcement that it might reduce its takeover bid for KWV.

KWV’s current financial position was advanced as the reason for Pioneer Foods possibly reducing its offer of R12/share to just over R11.

Danie de Wet, former KWV chair and an outspoken opponent of the deal, said this “gimmick” would not fool farmers. Paper was patient, and so were farmers. They would not fall for it, he added.

KWV’s board of directors said no decision had yet been taken about a possible selling price for the company’s shares and the board was waiting for the KPMG consultants’ recommendation in that regard.

KWV was also open to approaches from other interested parties who might wish to bid for the company.

On Monday Pioneer Foods and KWV issued a joint statement, in which Pioneer Foods set out its firm intention and KWV’s response was sketched out.

One of Pioneer Foods’ requirements was that KWV should produce audited management accounts for the period since the last audited statements at end-June as well as the current negotiation period to determine whether KWV was worth as much as Pioneer Foods was prepared to pay for it.

The KWV board indicated that the company’s financial position since the last audited statements, on which the original offer price had been based, had altered considerably.

From the basis on which the offer was made, a decline of 98c/share was possible.

The price was determined on the assumption that KWV’s operating capital amounted to R1.03bn. If it turned out to be less, the offer would be accordingly reduced.

It was on the strength of this that KWV had said Pioneer Foods’ offer could come down by 98c/share.

Pioneer Foods said the reason for the offer to take over KWV was KWV’s “iconic brands” like brandy and the Roodeberg wines, which would find a natural home in the brands-driven Pioneer Foods.

Manie Roode, the deputy chief executive of Clover, which is listing on the JSE on Tuesday, denied that the dairy producer planned to bid for KWV, as speculated in the media on Monday. He said no such proposal had been submitted at board level, nor had any such decision been taken.

Clover’s current focus was on the dairy industry, and that was what was occupying its attention.
 
- Sake24

For business news in Afrikaans, go to Sake24.com.

pioneer food group  |  kwv  |  clover
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