The JSE-listed international heavy equipment distributor, Barloworld, has been granted an extension by the Takeover Regulation Panel to finalize and distribute details of its R2.9 billion buy-out offer. The circular, which outlines the full terms and conditions of the offer, will now be issued to shareholders by no later than March 11, 2025.
Details of the Offer
Barloworld’s CEO, Dominic Sewela, alongside the Zahid Group, a Saudi Arabian family-owned business, proposed an offer representing an 87% premium to last month’s share price. The deal values Barloworld at R23 billion, with shareholders receiving a cash offer of R120 per share, which will remain unaffected by the R3.10 per share dividend declared in November.
If successful, the deal will result in Barloworld’s delisting and its transformation into a privately held, majority black-owned South African company, retaining its headquarters in South Africa. Notably, no job losses are anticipated.
Extension Due to Holiday Delays
Initially, the circular was to be distributed within 20 business days of the firm intention announcement (FIA) on December 11, 2024. However, the finalization process faced delays due to the December holiday period.
Significance of the Deal
Barloworld emphasized that the transaction reflects long-term investor confidence in South Africa. The R2.9 billion Khula Sizwe broad-based empowerment vehicle will retain its shareholding and commercial ties, ensuring continued benefits for its 29,000 black beneficiaries, including employees and public shareholders.
The Independent Board of Barloworld plans to recommend that shareholders approve the scheme, further underscoring its potential to unlock significant value and align with empowerment objectives.
Next Steps
Barloworld, in collaboration with Newco, will issue the circular, including details of a general meeting for shareholders to consider and vote on the resolution. This strategic move marks a significant milestone in Barloworld’s evolution, aimed at enhancing its ownership structure while maintaining its operational legacy.
