Competition Commission recommends approval of Barloworld's R23bn acquisition
Barloworld is a step closer to being purchased by a consortium made up of Entsha, which was created for the deal by the Katlego Le Masego Trust, and Saudi Arabia's Zahid Group.
Image: Supplied
The Competition Commission has recommended that the Competition Tribunal approve the proposed R23 billion acquisition of Barloworld, subject to certain public interest conditions.
This comes after the Public Investment Corporation (PIC), Barloworld's biggest shareholder with 21.93%, in April accepted the Standby Offer for the acquisition of all of Barloworld's ordinary shares for a cash consideration of R120 per share, with additional conditions, by the recently formed special purpose consortium, Newco.
Newco on Monday said the recommended conditions principally relate to its commitment as stated in the PIC undertaking announcement to implement a 13.5% broad-based black economic empowerment transaction in Barloworld after the delisting of Barloworld from the JSE and A2X.
Newco comprises Entsha Proprietary and Gulf Falcon Holding, a wholly-owned subsidiary of Zahid Group.
The Commission's recommendation will now be considered by the Tribunal for approval.
In addition to approval by the Tribunal, the Newco said the parties were continuing to work towards the fulfilment of the remaining conditions required for the transaction to become unconditional, including competition approvals from other jurisdictions.
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Shareholders will be advised in due course as to material developments in this regard.
Sydney Mhlarhi, spokesperson for Newco, said the Competition Commission's positive recommendation was another vote of confidence in the transaction and allayed concerns around a lengthy time frame to conclude the deal.
'We strongly believe that the transaction is positive for South Africa and will secure Barloworld's long-term future. It unlocks a material and highly attractive premium for shareholders and will create broad based economic and value benefits through the BEE transaction. We look forward to concluding the transaction in the near future,' Mhlarhi said.
Last month, the international heavy industrial equipment and food and ingredient solutions group agreed to extend the Standby Offer to 30 June 2025.
The Standby Offer is currently open and Barloworld shareholders who wish to accept the offer are encouraged to instruct their Central Securities Depository Participants (CSDPs) or broker to accept the offer on their behalf ahead of the acceptance deadline of 16h30 on 30 June 2025, after which, Newco will assess the level of acceptances received by this date and decide whether or not it wishes to waive the acceptance condition in whole or in part.
'We are confident, based on recent and ongoing discussions with shareholders, in relation to the Standby Offer, that we will receive sufficient levels of acceptance to proceed with the transaction,' Mhlarhi said last month.
Following the opening of the Standby Offer, Barloworld has received several inbound queries from ordinary shareholders who have indicated to their CSDPs or brokers that they wish to accept the Standby Offer but have been advised that they will only be able to do so at a later stage.
Barloworld said there was no lawful basis for a CSDP or broker to delay in accepting the Standby Offer on behalf of the shareholder in question, adding that CSDPs and brokers must review their processes to ensure that instructions in relation to the Standby Offer were processed without delay and appropriate confirmation was sent to the relevant shareholder once their instructions have been processed.
'The Standby Offer remains open and the timing for the implementation of the transaction will depend on acceptance levels of the Standby Offer and receipt of the required regulatory approvals,' it said.
'Barloworld Ordinary Shareholders should note that if Newco does not receive sufficient acceptances of the Standby Offer by 30 June 2025 to satisfy the Acceptance Condition, Newco may not waive the Acceptance Condition, in which event the Standby Offer will fail. Accordingly, Barloworld Ordinary Shareholders who have decided to accept the Standby Offer but have not yet done so should note that failing to accept the Standby Offer by 30 June 2025 may result in the Standby Offer failing.'
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