Barloworld Equipment. A Saudi Arabian consortium is making a bid for the Southern Africa-based Catepillar dealer group Barloworld. Picture: supplied
The Saudi Arabia-based consortium making a R23 billion bid for Caterpillar dealer Barloworld said Thursday it is not upping a buyout offer that has already been rejected by a big shareholder.
The Zahid Group and another company, Entsha, linked to Barloworld CEO Dominic Sewela, made a R120 per share offer in December. Some concerns were expressed among investors about Sewela’s dual role as CEO and as part of the bidding consortium, although the group said it had addressed potential conflicts of interest adequately. According to reports, UK-based Silchester International Investors, which holds 17.7% of Barloworld, has rejected the offer- it wants R130 a share.
Silchester has said its opposition will mean the takeover bid might fail. The shareholder meeting to vote on the transaction is February 26. The offer requires 75% support from voting shareholders to pass.
In a statement Thursday, Barlworld said the independent expert, Rothschild & Co, had determined the offer to be fair and reasonable. The transaction had also received support from Caterpillar.
The cash buyout offer also includes the R3.10 dividend declared in November 2024, so shareholders will be receiving R123.10 per share.
Zahid holds about 18.9% of Barloworld but is excluded from voting. The Public Investment Corporation holds about 19% of Barloworld.
Meanwhile, credit rating agency Moody’s Ratings affirmed Barloworld’s corporate family rating of Ba2 and upgraded its national scale rating to Aza.za from Az2.za, with the upgrade being attributed to Barloworld maintaining adequate credit metrics despite a downturn in the commodity cycle that has caused a decline in demand for heavy equipment.
“The stable outlook also reflects our expectations that Barloworld will maintain adequate credit metrics through the commodity cycles and the potential acquisition and delisting of the Barloworld transaction,” Moody’s said.
BUSINESS REPORT